Conteh v Fan - [2011] ACAT 45

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

CONTEH & FAN (Residential Tenancies) [2011] ACAT 45

RT 821 OF 2010
Catchwords: RESIDENTIAL TENANCIES – overcrowding premises with separate multiple tenants – tenancy or occupancy – lessor’s guarantee to provide lawful residence –tenant’s right to quiet enjoyment of premises – is compensation payable for distress and inconvenience in relation to breach of quiet enjoyment? – uninhability arising from the ratio of tenants to basic facilities – compensation payable to tenant – did the tenant’s duty to mitigate loss arise and if so when? – separate electricity metering requested for each tenancy before tenant can be required to pay electricity charges - mistaken payment of electricity charges to the lessor –can the lessor retain the mistaken payment from the tenant? – claim in restitution and claim in quantum meruit – when would the defence to a claim in restitution fail?

List of legislation: Residential Tenancies Act 1997, ss. 8, 9, 10, 15, 18, 83 and 104, and Schedule 1 (clauses 42, 46, 48, 51- 54, and 86-87)
Residential Tenancies Act 2010, s. 47

List of cases: Adair and Lauer v Timony (1999) NSWRT 4

Ahmadizadeh v Australian-German Welfare Society (Tenancy) [2006] NSWCTTT 542
Bremer v Jones Family Investment P/L (2002) NSWCTTT 195
Brodziak v Lowrey (1996) NSWRT 14
Bull v Shangri-La Caravan Park (1997) NSWRT 44
Coombe v E Cocco and Sons Investments P/L
(1997) NSWRT 147
Damatre v Donnelly (2005) NSWCTTT 490
David Securities P/L v Commonwealth Bank of Australia (1992) 175 CLR 353
Deleiven v Department of Housing (1999) NSWRT 21
Finn v Finato (2004) NSWCTTT 179
Hogg v George Briffa t/as Ballina Palms Village
(2001) NSWRT 21
Hopkinson v Conaught P/L (1997) NSWRT 142
Jeffrey v Fitzroy Collingwood Rental Housing Association Ltd [1999] VSC 335
Kerr v Czeizler (1998) NSWRT 185
La Rosa v Tulla (1998) NSWRT 163
Moore and White v Lesbian Space Inc (1997) NSWRT 154
O’Donnell v Leppington Pastoral Co P/L
(2001) NSWCTTT 371
Ovidio Carrideo Nominees P/L v The Dog Depot P/L
[2006] VSCA 6
Parisi v Kosac (1996) NSWRT 75
Pavey & Mathews P/L v Paul (1986) 162 CLR 221
Re: John Costello and Citra Constructions Ltd (1990) FCA 9
Rich and Ruthven v Chen (2010) NSWCTTT 25
Roxborough v Rothsman of Pall Mall Australia Ltd

(2001) 208 CLR 516
Schofield v Carroll (1997) NSWRT 138
Simonoski v The Trustees of the Society of St Vincent de Paul (NSW) (Tenancy) [2007] NSWCTTT 395
Van Haren v Cavangh (2000) NSWRT 49

List of texts: Anforth and Christensen, Residential Tenancies Law and Practice in NSW, (4^th ed., 2008), Federation Press.

Tribunal: Mr A. Anforth, Senior Member

Date of Orders: 28 June 2011
Date of Reasons for Decision: 28 June 2011

AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 821 OF 2010

Yayah CONTEH
Applicant/Tenant

AND
Jason FAN
Respondent/Lessor

TRIBUNAL: Mr A. Anforth, Senior Member

DATE: 28 June 2011

CORRECTED ORDER

The lessor is to the pay the tenant the sum of $3,830 within 28 days calculated as follows:

(a) for economic loss arising from a breach of clause 51 of Schedule 1 of the Residential Tenancies Act 1997 (the Act) - $600; and,
(b) for non-economic loss for a breach of clauses 51 and 52 of Schedule 1 of the Act - $630; and,

(c) refund of the electricity charges paid by the tenant to the lessor- $2600.

This order is corrected under section 63 of the ACT Civil and Administrative Tribunal Act 2008.

………………………………..

Mr A. Anforth, Senior Member

REASONS FOR DECISION

Overview of the case

This case concerned a claim by the tenant of part of a house in the ACT, for compensation arising from overcrowding caused by the actions of the lessor:
(a) subdividing the single house and garage into 10 bedrooms with a caravan in the back yard;
(b) renting each bedroom and the caravan as a separate tenancy with a license to each tenant to use the common facilities.
The Applicant was a tenant of one of the bedrooms in the house from
13 January 2007.
On 14 July 2010, the ACT regulatory authority (ACTPLA) intervened to close down the house. It required all the tenants to vacate the premises. At this time there may have been as many as 30 people living in the house.
The tenant has claimed for the loss of use of facilities and the disturbance to his quiet enjoyment of the premises generally, each arising from the overcrowding.
The lessor levied the tenants of each bedroom for the total electricity costs for the house. There was no separate metering in the house for each bedroom and no way of accurately knowing what amount of electricity each tenant actually consumed. The tenant in the present proceedings sought a refund of the money paid for electricity.

Procedural history

The Applicant/tenant lodged an application with the Tribunal on
12 October 2010 in which he defined the issues in dispute and remedies sought as follows:
Please Identify the Issues In Dispute, for example, payment of rental arrears or that the lessor/grantor fix a broken heater:
Rebate of Rent paid during the tenancy:
The Applicant seeks a rebate of 100% of the rent paid during the tenancy under clause 87(3) of the SRTT, mainly on the basis that the property was in no materially different condition at the commencement of the tenancy as of 14th July 2010. In addition, the Respondent had breached clause 54(1) of the SRTT by failure to provide the premise to the Applicant in a reasonable and habitable state at the commencement of the tenancy.
Reimbursement of utility charges paid throughout the tenancy:
The Applicant seeks a reimbursement of the amount paid for utilities charges during his tenancy. In accordance to clause 42(c) of the SRTT, the Respondent is liable for that cost. Further to note that clause 3 under ‘The rent’ of the ‘Occupancy Agreement (Fixed term)’ is void under section 9 of the Residential Tenancies Act 1997.
Compensation for losses
The Applicant further seeks for a compensation for both financial and noneconomic losses under section 83(d) of the Residential Tenancies Act 1997 due to Respondent’s breach of the SRTT.
Please state the nature of relief you seek (what sort of order you want the Tribunal to make), for example, an order that the tenant/occupant pay rental arrears or the lessor/grantor fix the broken heater.

The nature of the relief sought is as follows:
a.   Rebate of Rent paid for the period of tenancy
The Applicant seeks a rebate of 100% of the rent paid during the period of the tenancy from 13th January 2007 to 13th July 2010, an amount totaled at $19,790.00.
b.   Reimbursement of utility charges paid during the period of tenancy
The Applicant seeks a reimbursement of $2,649.40 paid for the utility charges incurred during the period of the tenancy from 13th January 2007 to 13th July 2010 at the premises.
c.   Compensation for Financial Loss
The Applicant seeks compensation for the financial losses incurred to him from the eviction on 14th July 2010. This includes $300.00 for the lost of wages from missing 2 days of work, $100.00 for the moving cost, $200.00 for the extra money spent on fast food during the period of
14th July to 18th July 2010 where he had no place to cook.
d.   Compensation for Non-Economic Loss
The Applicant seeks compensation in an amount of no less than $2,500.00 for the mental and physical suffering and distress resulted both from the eviction on July 2010 and the post-eviction trauma and problems.

Please give a brief history of the dispute, (why you are making the application)
If you are claiming money please show calculations and total amount claimed
HISTORY

Our client commenced living in the property located at 46 Horsley Crescent, Melba on 13th January 2007. Our client was given a separate key to his room and shared common areas of the premises with other co-tenants. The premises were overcrowded since the commencement of the tenancy. On 14th July 2010, the premises were assessed and concluded as not fit for habitation by ACT government agencies. Consequently, all tenants were evicted.
Our client had signed a written agreement titled “Occupancy Agreement (Fixed terms)” with the landlord Mr Jason Fan. He had also paid an amount of $400.00 as ‘security bond’ to Mr Fan on the commencement of his tenancy, which has been repaid. This amount was never lodged to the Office of Rental Bond.
During the period of tenancy, our client paid the rent of $220.00 per fortnight in advance to Mr Fan, the amount totaled at $19,790.00. In addition, our client paid utility charges on various occasions during his tenancy which is shared within the property, the amount is totaled at $2,649.40. Copies of the receipts for these amounts are attached.
Post-eviction, our client subsequently moved into suitable housing on
20th July 2010. The moving cost incurred to him was $100.00. Our client also had to call off two days of work during the period of 15th July to 20th July 2010. Our client was going through a lot of stress for living in this sub-standard place. This stress further extended when he was abruptly evicted without any notice. The post-eviction stress was also enormous, especially during the 4 days temporary stays offered by ACT government, he was constantly worried about where to stay afterwards.
APPLICANT’S CLAIM
The Act is applicable in Applicant’s case because, although signed agreement between the parties is titled as “Occupancy Agreement”, its essence was nevertheless in nature of tenancy. The Applicant had exclusive possession to his bedroom, the agreement was made directly between him and the Respondent (the landlord) and there is a clear intention of lessor and tenant like relationship. The Applicant relies on the decision of NSW Residential Tenancy Tribunal in Ahmadizadeh v Australian-German Welfare Society (Tenancy) [2006] NSWCTTT 542, in this decision, the Tribunal states that:
The most important of these was the applicant’s retained dominion and control over an area or portion of the premises (in this case, his bedroom) which he occupied under his agreement with the respondent. The applicant’s ability to do this was conceded by the respondent. In all the circumstances, the Tribunal found that the relationship did not amount to that of boarder or lodger but fitted within the characteristics of a landlord and tenant relationship. In the circumstances, the Tribunal found that it had jurisdiction.

In addition, the Applicant relies on Simonoski v The Trustees of the Society of St Vincent de Paul (NSW) (Tenancy) [2007] NSWCTTT 395, where the tribunal found that, in cases where the exclusive rights to bedroom is given, occupant are responsible for own cleaning, certain house rules were set (such as ones written in the agreement) all contributed to the factor that it was a tenancy more than an occupancy. Especially, the Tribunal stated:
The most significant element of dominion and control does not fit with a boarder or lodger but with the relationship of landlord and tenant. The Tribunal has jurisdiction to determine the claim.

Rebate of Rent paid for the period of tenancy:
The Applicant seeks a 100% reimbursement of the rent he paid during his tenancy, totaled at $19,790.00. The Applicant submits that since the start of the tenancy, the condition of the premises had been materially the same as when ACT government agencies deemed it to be unfit for habitation.
Reimbursement of Utility Payment:
The Applicant seeks a reimbursement of the $2,649.40 paid for utility charges during his tenancy.
Compensation for Financial Loss:
The exact amount of the financial loss suffered by the Applicant during the relevant period will sought to be established by evidence adduced at the hearing of this matter, but it is estimated to be about $600.00. This includes the loss of wage for two days, extra money spent on fast food during the temporary period from 14th July to l8 July 2010 and the moving costs incurred.
Compensation for Non-Economic Loss:
The Applicant suffered from paramount distress from the sudden eviction. This has impacted negatively on the Applicant’s mental state. The Applicant was at an extremely vulnerable position during that temporary period and such experience may also have the likelihood to affect the Applicant’s future state of mind. The extent of these effects will be proved by evidence adduced for the hearing of the matter, but is estimated at about $2,500.00.

Annexed to the tenant’s application were various receipts for money paid by the tenant to the lessor, none of which were contentious (Exh A1).
Conciliation in the matter failed and the matter was listed for hearing in the Tribunal. On 23 November 2010 directions were made for the filing of evidence by the parties and for the filing of their respective Statement of Facts, Issues and Contentions.
On 16 December 2010, the tenant filed his Statement of Facts, Issues and Contentions annexed to which were various documents and photos. The Statement of Facts, Issues and Contentions read:
EVIDENCE
The Applicant will rely at the hearing on the following evidence:
1.Receipts provided by the Respondent regarding payments of rent and payments for utility charges levied on the Applicant (already provided in the Statement of Claim);

2.Partial email exchange provided by ACT Planning and Land Authority under FOI (Attachment ‘A’);

3.Letter to Applicant and fellow-tenants at 46 Horsley Crescent from ACT Health dated 15th July 2010 (Attachment ‘B’);

4.Chief Minister’s talkback Brief dated 30th July 2010 (Attachment ‘C’);

5.Record of Inspection carried out on 46 Horsley Crescent on 14th July 2010 plus photographs and dated 25th August 2010 (Attachment ‘D’);

6.Housing Report of Raymond Reavley on premises at 46 Horsley Crescent dated 22nd September 2010 (part only- provided by ACT Planning and Land Authority under FOI (Attachment ‘E’); and

7.Record of Inspection carried out on 46 Horsley Crescent on 14th July 2010 plus photographs and dated 11th October 2010 (Attachment ‘F’).

In addition to the written evidence specified above, the Applicant will give oral evidence to the Tribunal and will be available for cross-examination.
STATEMENT OF CASE
The Applicant will contend that he has the right to seek refund of the rent and other payments made because the Respondent failed to provide habitable premises, as was required of him under a tenancy agreement or in the alternative as was required of him under an occupancy agreement.
Tenancy
The Applicant contends that he was living in the premises under an implied tenancy agreement. In this regard the Applicant will argue that although signed agreement between the parties is titled as ‘Occupancy Agreement’, its essence was nevertheless in nature of tenancy. The Applicant had exclusive possession to his bedroom, the agreement was made directly between him and the Respondent (the landlord) and there is a clear intention of lessor and tenant like relationship. The Applicant relies on the decision of NSW Residential Tenancy Tribunal in Ahmadizadeh v Australian-German Welfare Society (Tenancy) [2006] NSWCTTT 542…(where after follows a verbatim repeat of the claim).

The annexed documents were as follows with the exhibit number allocated at the hearing on 30 March 2011:
Exh A2 An email from Pam Davoren to John Wollard of 12/7/10

Exh A3A letter from John Wollard of ACT Health to the residents of the premises dated 15/7/10

Exh A4A Record of Inspection of the premise by ACT Planning and Land Authority of 14/7/10 with annexed photos of the inside and outside of the premises

Exh A5A statement by Ray Reavley, Electrical Inspector with ACTPLA dated 22/9/10

Exh A6A Record of Inspection of the premise by ACTPLA of 6/10/10 with annexed photos.
On 20 January 2011, the lessor filed his Statement of Facts, Issues and Contentions which read:
History
1.The Applicant resided at 46 Horsley St Melba (“the House”) as the tenant of the Respondent from 13 January 2007 to 14 July 2010.

2.The terms of the tenancy agreement were as implied pursuant to Section 8 Residential Tenancies Act 1997 and additionally pursuant to a written agreement dated 13 January 2007 for a term of one year, and oral variations thereto, and as implied by convention between the parties.

3.By the written agreement the Applicant leased a room and shared facilities in the House at the rent of $85.00 per week.

4.On or about 23 March 2007 the parties agreed orally for the Applicant to let a substitute room and the shared facilities at the rent of $115.00 per week, and otherwise on the existing terms.

5.On or about 15 December 2007 the parties agreed orally for the Applicant to let a substitute room and the shared facilities at the rent of $110.00 per week, and otherwise on the existing terms.

6.At all material times it was an express term of the agreement, or alternatively a term implied by convention between the parties, that the Applicant would pay his share of the quarterly charges for electricity and gas consumed in the House calculated by reference to the number of tenants in the House and the number of days each tenant was in occupation during the quarter.

7.The Applicant paid all rent and charges in accordance with the agreement.

8.On 14 July 2010 a Territory Government Authority declared the conditions in the House to be insanitary. The Applicant vacated his room in the House shortly thereafter at the request of the authority. The Respondent did not ask him to leave.

Claim
9.The Applicant seeks recovery of rent and utilities charges paid by him, and damages for breach of agreement.

Tribunal powers
10.The Tribunal does not have power to order payments of money other than in accordance with the general law. The Tribunal has power to make orders for payment by way of restitution, and as damages.

Rent
11.The Applicant is not entitled to reimbursement of the rent by way of restitution because
a.   The payments were not made under a mistake as the Applicant was obliged to make them.

b.   In the alternative, there has not been a total failure of consideration - the Applicant has obtained accommodation satisfactory to him as evidenced by his continued voluntary occupation of the premises.

c.   Further, retention of the monies paid is not unjust as the Applicant

i.never complained to the Respondent that the premises were not fit for habitation
ii.continued to make payments of rent and
iii.remained in the premises for three- and-a- half years; and

d. otherwise acted in a manner calculated to lead the Respondent to think that the parties were contracting on the basis that the premises were fit for habitation such that the Applicant is estopped from denying that state of affairs.

12.If, which is disputed, the Respondent is in breach of an obligation to ensure the premises were fit for habitation, the Applicant is only entitled to damages for losses suffered in consequence of the breach. Rent was not part of any loss as it was paid pursuant to the obligation to pay, not as a consequence of any breach.

Utilities charges
13.On the proper construction of standard terms 42 (c) and 48, the Applicant was obliged to meet the cost of the services consumed by him.

14.It was an express or alternatively implied term of the agreement that the Applicant’s consumption would be calculated by reference to the number of tenants and days of the relevant quarter on which they were in occupation of the premises, and the charges paid by the Applicant were calculated on that basis.

15.Alternatively, The Applicant is not entitled to restitution because
a. The payments were not made under a mistake as the Applicant was obliged to make them.

b. In the alternative, there has not been a total failure of consideration - the Applicant has services in the form of electricity and gas to the approximate value of the payments made.

c. Further, retention of the monies paid is not unjust as the Applicant
i.never complained to the Respondent about the demand for or amount of the payments,

ii.continued to make the payments, and

iii.remained in the premises for three- and-a- half years; and

otherwise acted in a manner calculated to lead the Respondent to think that the parties were contracting on the basis that the Applicant agreed to make payments on the calculated basis such that the Applicant is estopped from denying that state of affairs.

Non-economic loss and loss following vacation of the premises
16.If, which is disputed, the Respondent is in breach of an obligation to ensure the premises were fit for habitation, the Applicant is only entitled to damages for losses suffered in consequence of the breach. The Applicant is not entitled to damages for mere disappointment at the breach.

17.The Applicant has not suffered any loss during the term of the lease as he received accommodation to the standard he expected to get.

18.The Respondent says that the lease was not determined as a result of any breach by the Respondent. In the alternative, any breach by the Respondent has resulted only in the alleged expenditure incurred and income foregone on the vacation of the premises. The Applicant has not been shown to have suffered any other loss compensable in law.

On the 20 January 2011, the lessor filed a copy of a document entitled ‘Occupation Agreement’ between the parties [Exh R1]. The Occupation Agreement did not specifically purport to be a residential tenancy agreement and did not contain the standard terms of Schedule 1 of the Act. On its face, the document would seem to be that which it purported to be, namely, an Occupation Agreement for a room in a house and not a tenancy agreement. However, the parties were in agreement that a residential tenancy agreement did in fact exist between the parties for the bedroom occupied from time to time by the Applicant. This point was taken up by the Tribunal at the commencement of the hearing on 30 March 2011 at which time both parties affirmed their concurrence on the existence of a residential tenancy agreement.
Once a residential tenancy is found to exist, then the standard terms of Schedule 1 of the Act are automatically imported into the tenancy agreement between the parties.
On the 20 January 2011, the lessor filed a statement of his evidence [Exh R2] which read:
1.My full name is Fan Qiang Hua. I am also known as Jason Fan. I am 49 years of age. My date of birth is 4 March 1961. I currently live at my house at
23 Catchpole Street Macquarie, ACT 2615. Prior to July 2010 I lived elsewhere.

2.The Applicant Yayah Conteh (“Yayah”) telephoned me shortly prior to
13 January 2007. He said that he was looking for accommodation and needed a single room. I said that I had one room in Melba and we arranged to meet there.

3.He then came to 46 Horsley Crescent Melba, ACT 2615 (‘the House”) to inspect the room (“the First Room”). The First Room was fully furnished with a single bed, computer desk and chair. It measured 2.65rn x 3.5rn.

4.I purchased the House in about 2005. It was a two-storey house with four bedrooms, two bathrooms and three toilets. I then engaged contractors to put partitions in the living areas to create more bedrooms as I knew from experience that there was demand for single rooms at cheaper rents, The rents I asked for at the House were about 75% of the market rate, and sometimes a bit less if the tenant could not afford to pay more. At the time Yayah came to inspect the House there were four additional bedrooms.

5.After Yayah had inspected the House and the Room with me he said that he wanted to take it. We discussed how long he wanted to stay and the rent.

6.I then showed Yayah a contract form with the title “occupancy agreement”. After filling in the details including the term of one year and the rent at $85.00 per week I said words to the effect, “If you are happy can sign this agreement?” He said, “Okay”, or words to that effect, and signed the document. I have not been able to find a copy of the document. Annexed hereto and marked with the letter “A” is a copy of the form of contract which I showed to Yayah.

7.Yayah moved into the First Room or about 13 January 2007.

8.On or about 23 March 2007, I was at the House to check on it and collect rent from other occupants. Yayah came to me and pointed to an unoccupied room which was adjacent to a toilet (“the Second Room”) and said words to the effect of, “Jason I want to move into this room”. I said, “Its okay, if you are happy you can move but the rent should go up because it is larger and you have a toilet.” Yayah then said, “I will pay $115.00 per week because I can’t afford to pay more.” I agreed to this.

9.Yayah had exclusive use of the toilet as it could only be accessed by going into the Second Room. The Second Room measured 4.7m x 3.25. It was furnished with a double bed, a television, a bed side table, a chair, and a 150L fridge. Yayah said that he did not want the double bed because he had his own. I moved the double bed from the room.

10.Yayah was living in the Second Room from about 13 January 2007 to about 14 December 2007.

11.On or about 15 December 2007 I went to the House to check on it. I met Yayah who said he wanted to change rooms again to another room which was then unoccupied (“Third Room”). He said, “Jason I want to move to this room and I will pay $110.00 per week because I can’t afford to pay more”. I said, “Okay if you want you can take it.”

12.This room measured 4.80m x 3.25m. This room had a 150L Fridge, a coffee table, computer desk and chair. Yayah supplied the sofa and double bed. I also provided Yayah with a wardrobe because it did not have an inbuilt-wardrobe.

13.Yayah was in the Third Room until 14 July 2010 when the authorities came and told everyone to leave. I did not speak to Yayah before he left.

14.When the written agreement expired in January 2008 I did not ask Yayah to sign another one as I was not worried about him paying rent. I regarded him as a reliable and co-operative tenant. Over the time that he was in the House there were only a few times when he did not pay rent on time each fortnight and then he made arrangements with me and always caught up later.

15.The House was connected to electricity and gas. There was one meter for the electricity and another for the gas. Both accounts were in my name and I paid the bills. When the quarterly bills came I calculated the amount to be paid by each tenant by reference to the number of tenants and the number of days that each tenant was in occupation during the quarter. I then gave each tenant an invoice which they paid to me. Yayah always paid his when I gave it to him.

16.Yayah never complained to me about the House or the room he was in. My impression was that he was happy to live there and with the arrangements.
On 15 March 2011, the tenant filed a statement of his evidence [Exh A7] which read:
I, Yayah Conteh of 78 Cygnet Crescent Red Hill in the Australian Capital Territory, make oath and say:

1.I am the Applicant in this matter.
2.I have been in Australia since 2004. 1 lived with my mother and sister until 2007 when I decided to find accommodation for myself. At this stage I had no experience of, or knowledge of how a tenancy worked and of the rights conferred on tenants by the Residential Tenancies Act 1997.
3.In January 2007 I contacted the Migrant Information Centre in Civic, and asked how I might find somewhere to live. They referred me to Mr Fan, who had advertised vacancies on the internet. They did not provide me with any advice about tenancy rules, or warn me to beware of people exploiting those unfamiliar with tenancy rules.
4.I rang Mr Fan in mid-January 2007 and told him I needed accommodation. Mr Fan said that he had a room in Melba available, and invited me to have a look at it. I did know how to find the address Mr Fan had given me, so arranged to meet him at the bus stop opposite the Labor Club in Belconnen.
5.We met at the bus stop and Mr Fan conducted me to premises at 46 Horsely Crescent, Melba.
6.My initial assessment of the premises was that it was acceptable to me as I was desperate. At that time, I understood that about eight people would also be living in the premises.
7.We discussed terms and Mr Fan said that he would accept $85 per week. He said that additionally, every three months each of the tenants would have to pay a contribution towards the water and electricity charges. Gas was connected to the premises in about March 2010.
8.I did sign an agreement - which I no longer possess - under which I agreed to pay $85 per week plus my share of utility charges. Mr Fan did not explain the agreement but I understood that it was a tenancy agreement
9.With regard to the utility charges, Mr Fan would initially tell me how much I needed to pay for electricity and water and I paid that amount without question. Later on, about 2008, I began to query my contribution. Sometimes Mr Fan showed me the figures, at other times he refused to show me the figures.
10.I made my payments of rent, and paid my contribution to utility charges in full and on time. At no time did I sign any other agreement.
11.During the period I lived at 46 Horsely Crescent Melba, I changed rooms on several occasions. Each time I changed rooms, the rent changed but I was not asked, and did not, sign any further agreement. I paid $115 per week from about January 2007 until the end of 2007, and then $110 per week from that time until I was evicted from the premises on 14th July 2010.
12.During the period I lived at 46 Horsely Crescent Melba, the number of people living on the premises fluctuated, with a minimum of ten people, and a maximum of 12 or more. The large number of people living with me, and the noise they made caused me annoyance and distress. I had many arguments and one physical fight with others living on the premises. Mainly, these disputes arose out of the fact that the noise was so great that I could not sleep. The situation was made worse because I was doing shift work, and could not sleep when I came home.
13.I found it difficult being on the premises due to the constant noise, the coming and going of vehicles, the noise of people talking on their mobile phones, the sound of people cooking late at night and the crying of children. At times, the stress of living on the premises became too much to bear, and I would walk down to the edge of Lake Ginninderra and sit there for hours at a time.
14.On one occasion, when I over-reacted to the constant noise by fighting with fellow-tenants, and the police attended. They said that they would do their best to try and get my fellow-tenants to limit their noise - but their efforts were in vain.
15.[omitted on objection]
16.I constantly complained to Mr Fan about the conditions in which I was living. On more than one occasion, I told Mr Fan that he had breached his agreement with me to supply acceptable and livable premises.
17.After the sudden eviction of 14th July 2010, I suffered greatly from the abrupt change in my living circumstances. I lost two days wages because I was so stressed I could not work. I slept in my car for two days, and had to buy expensive take-away food. When I regained accommodation, I had to buy a lot of items that I had lost after the eviction, or which had gone missing. This included replacing food lost when my refrigerator was turned off, and replacing household cleaning items and personal care items.

The matter was listed for hearing on 23 March 2011. Mr Emerson-Elliott, solicitor of the Welfare Rights and Legal Centre appeared for the tenant and
Mr Arthur of counsel appeared for the lessor instructed by Capital Lawyers. The matter did not proceed on that day and was adjourned to a special fixture on
30 March 2011 at which time the parties appeared with the same representation.

The floor plan of the premises

The house had a ground floor, an upper floor and a garage. The ground floor was divided into two halves (side A and side B) with a number of bedrooms in each half. The upper floor had 1 bedroom.
On 30 March 2011 the parties exhibited a sketch floor plan of the ground floor of the premises [exhibit A8]. Side A is the three bedrooms at the top of the sketch. Side B is the five bedrooms at the bottom of the sketch. The garage is to the right hand side of the sketch.

Side A

Side B

Tenancy agreement or an occupancy agreement?

At the commencement of the hearing on 30 March 2011 the Tribunal revisited the issue of whether the agreement between the parties was truly a residential tenancy agreement as opposed to a license to occupy the premises. Whether the agreement between the parties was a residential tenancy agreement, or an occupation agreement did not affect the jurisdiction of the Tribunal. The Tribunal has jurisdiction over disputes in either case. It did however, affect the terms of the agreement and hence, the rights and obligations of the parties. The mandatory terms of Schedule 1 of the Act and other provisions in the Act apply only to tenancy agreements and not to occupation agreements. This in turn may affect the powers available to the Tribunal.
The parties affirmed their common position that a residential tenancy agreement existed between the parties. The Tribunal accepted this joint submission.
The Tribunal did not accept the joint submission of the parties on this point simply because it was the joint position. Whether the Applicant’s right to occupy the premises was a residential tenancy agreement or not, depended on the objective characterisation of the terms of the agreement between the parties. That agreement includes both the written and oral parts of the agreement. The mere description by the parties of their agreement as being a residential tenancy is not definitive of the proper characterisation of the agreement (Anforth and Christensen, Residential Tenancies Law and Practice in NSW (4^th ed., 2008) at [2.3.0] [2.6.1]).
However, there is often very little difference between a license to occupy a premises and a tenancy agreement. If the resident in fact obtains an exclusive right to occupy their bedroom, with a license to use the common facilities of the house, then the arrangement could be characterised as either a tenancy or an occupancy agreement (Anforth and Christensen, Residential Tenancies Law and Practice in NSW, (4^th ed., 2008) at [2.3.0] [2.6.1]). At this point the common intention of the parties becomes a relevant factor in the characterisation process (Anforth and Christensen Residential Tenancies Law and Practice in NSW, (4^th ed., 2008) at [2.3.9]).
The tenancy of the Applicant (and presumably the other residents) extended only to their own bedrooms. Each resident was a tenant of their own bedroom which conferred upon them the exclusive right of possession of their bedroom. The tenancy carried with it a non-exclusive license to use the common area and facilities. The right to possession of the common areas and facilities remained with the lessor subject to licenses granted to the individual tenants.

The issues to be determined

The Tribunal sought to obtain clarification and agreement on the ambit of the issues to be determined. The parties agreed with the following formulation of the Applicant’s issues to be the determined:
(a)   whether the tenant suffered a loss of the facilities in the house arising from overcrowding;

(b)   whether the tenant was entitled to a refund of all electricity charges paid by the tenant on the basis that there was no separate metering of his usage;

(c)   whether the tenant was entitled to compensation by way of both economic and non-economic loss for each of the above and for the fact that he had to vacate the premises on 14 July 2010 after the ACT Planning and Land Authority declared the premise to be uninhabitable.
The Respondent’s issues were:
(a)   whether the tenant had mitigated any loss stemming from the overcrowding by failing to move out of the house;

(b)   whether the Tribunal has any power to order a refund of the electricity charges paid by the tenant because the charges had been voluntarily paid by the tenant for the benefit he received in an electricity supply;

(c)   whether non-economic loss can be ordered for mere disappointment or other emotional reactions arising from a breach on the lessor's part.

The evidence

The affidavit evidence of the parties was received into evidence as the deponent’s evidence in chief.
The tenant and the lessor both gave further evidence in chief and by way of cross examination.
There was considerable uncertainty in the tenant’s evidence over the time lines for some events, the numbers of people involved and about the tenant’s employment status. These issues were raised with both parties on a number of occasions during the hearing, without any resolution of the uncertainties.
Notwithstanding the deficiencies in the evidence, the Tribunal’s duty is to do the best it can on the evidence available. If there is no evidence in support of a certain proposition, then of course the party propounding that proposition has failed to discharge their evidential onus. However if there is some evidence in support of the proposition, then the Tribunal must consider that evidence in coming to a decision on the balance of probabilities (Re: John Costello and Citra Constructions Ltd (1990) FCA 9 at [30]).
What follows below are the findings of fact to which the Tribunal has come, based on the evidence.
At the time the tenant moved into the house on 13 January 2007 there were 7 bedrooms in which 8 people resided:
(a)   1 bedroom upstairs;
(b)   3 bedrooms on side A; and,
(c)   3 bedrooms on side B.
The upstairs bedroom had its own ensuite. The downstairs bedrooms shared two toilets and two showers.
Over time, the lessor further subdivided the downstairs side B to create 5 bedrooms as per the sketch at Exhibit A8. Side A remained with 3 bedrooms. The lessor renovated and subdivided the garage as two bedrooms and brought a caravan into the back yard. The time line for these changes is not clear from the evidence of either party.
None of these changes were approved by ACTPLA and there was no certificate for the occupation of the garage as bedrooms.
There were two toilets to service the 8 downstairs bedrooms, 2 garage bedrooms and the caravan. One of these toilets was located inside one of the bedrooms and was solely for the use of the resident of that bedroom. This left 1 toilet to service 7 bedrooms downstairs, the 2 in the garage and the caravan.
There was 1 shower for the 8 downstairs bedrooms, the 2 bedrooms in the garage and the caravan. There was 1 kitchen for the whole house.
By 14 July 2010 there were as many as 30 people living in house as a whole (including the garage and caravan). This figure was proffered by ACTPLA. The evidence of the parties on this point was vague. Whether the figure of 30 is accurate is not fundamental to the findings in the matter. It would matter little to the outcome whether the figure was 20, 25, 30 or 35.
The evidence of the tenant was that the number of residents of the house as a whole progressively increased over time and included families with children occupying a single bedroom. The time line for the increase in the number of the residents was as imprecise as was the evidence for when the additional bedrooms were added.
The tenant said that his situation was sufficiently comfortable when he first moved into the house in January 2007, at which time there were 8 other residents. But as the number of residents increased so did the noise, the competition for facilities, the lack of cleanliness in the common areas and the disputes. The tenant was particularly annoyed about the use of the kitchen into the early hours of the morning by other residents which disturbed his sleep.

The Tribunal tried on several occasions to obtain from both parties even an approximate time line for the increase in bedrooms and residents but without success. As much as could be ascertained, was that the maximum to which the number of residents grew, which could have been as high as 30, was in the last several weeks of the tenancy. Beyond this point in time, the evidence is that the increase was progressive, starting early in 2008.
It seems that the tenant moved bedrooms three times during his stay in the house. Different bedrooms had various advantages or disadvantages such as size and proximity to facilities. One bedroom had its own toilet.
How the lessor determined the rent to be paid by each resident was not apparent from the evidence. The evidence of the parties was the Applicant’s rent varied depending on which room he occupied and was between $85pw and $115pw.
The lessor collected the costs of the electricity from the residents as a whole. The cost to each resident was on a pro rata basis i.e. per bedroom. The tenants of each bedroom were not given copies of the electricity accounts, they were simply asked to a pay a sum of money that was said to represent their share of the electricity. It was agreed that the tenant had paid $2600 for electricity during the tenancy.
There was only the one central electricity meter and thus there was no way of knowing how much electricity any particular tenant consumed.
There were varying numbers of people in each bedroom. In some bedrooms there was a family of two adults and several children. A pro rata based on individual bedrooms would not take account of the fact that the residents of some bedrooms used more electricity than the residents of other bedrooms.
The tenant took up his grievances arising out of the overcrowding with the lessor on an undefined number of occasions. The lessor initially took some action to ask other residents to be respectful of the rights of others but this apparently had little effect. On one occasion, the police were called to a dispute. At some undefined point in time, but probably towards the end of the tenancy, the lessor told the tenant that if he was unhappy he could leave at any time without giving notice.
The tenant worked as a cleaner during the tenancy. Sometimes, he had one part time job, sometimes one full job and sometimes he had a second part time job in conjunction with his other employment. The time lines for his employment were as imprecise as the rest of the evidence.
The tenant said that he did initially make some enquiries for a new tenancy elsewhere but that he did not take the matter any further. The tenant gave two reasons for this. First, he was a migrant to Australia and was unfamiliar with the tenancy process. Secondly, he was expecting his wife to join him in Australia and he wanted to save money to buy a house when she arrived.
In cross examination, the tenant said that the rent in the existing house was low and this suited his capacity to save. The Tribunal understood the tenant to say that he chose to stay in the house and suffer the inconveniences because it was easier than moving and the rent was cheaper than elsewhere.
At one point the tenant said that his state of impecuniosity was a factor that limited his choice in not leaving the house. On cross examination, it transpired that the tenant had been working constantly in one and sometimes two jobs and receiving some Centrelink benefits. He intended to buy a house when his wife arrived. The tenant did not lead evidence of actual income, or lack thereof, despite a request from the Tribunal to do so. His financial situation did not appear to the Tribunal to limit his decision to remain in the house.
The matter was adjourned to 18 April 2011 for submissions on the evidence and the law.

The legal framework and the application of the facts to the law

On the premise that the agreement between the parties was a residential tenancy agreement, the terms of the tenancy agreement are defined by Schedule 1 of the Act.
The parties are bound by the terms of Schedule 1 of the Act and cannot contract out of its provisions (sections 8 and 9 of the Act and clause 3
Schedule 1) except via the process set out in section 10 of the Act, which was not used in this case.
Schedule 1 contains a number of clauses that are of immediate relevance.
The tenant’s exclusive right of possession of the part of the premises leased to him is contained in clause 53. The tenant’s right to quiet enjoyment of his part of the premises is contained in clause 52.

The claim for compensation arising out the termination of the tenancy:

Clause 51 provides:
51. The lessor guarantees that there is no legal impediment to the use of the premises for residential purposes by the tenant.
In accordance with clause 51 the lessor ‘guarantees’ that the occupation of the premises as a residence is lawful, so that the tenant’s quiet enjoyment of the premises will not be disturbed by force of the law. The word ‘guarantee’ is absolute and makes the satisfaction of this clause a matter of strict liability. Thus, the motivations of the lessor, or the reasonableness of the lessor’s actions are irrelevant to whether the clause has been breached or not.
This clause is relevant to the fact that the tenant was ultimately required to leave the house by ACTPLA because of the unlawful overcrowding. At the hearing, the Tribunal raised with the parties whether there was any contest over the lawfulness of ACTPLA’s conduct in ordering that the occupation of the premises cease on 14 July 2010. Parties were invited to make submissions on the point. None were made. In these circumstances, the Tribunal presumes the regularity and therefore the lawfulness of ACTPLA’s actions.
Clause 51 is also relevant to the unauthorised renovations to the house which converted common areas to bedrooms. Even if the particular renovations in the house did not require structural approval, it is the case that the conversion of the garage for human occupation required the issue of a certificate of occupancy for that purpose.
In any event (and leaving aside the issue of the garage), the tenant’s quiet enjoyment and exclusive right of possession of his bedroom was brought to an end by force of law on 14 July 2010 in breach of the lessor’s guarantee contained in clause 51.
The Tribunal finds the lessor to be in breach of clause 51 as at the 14 July 2010. The parties have agreed to compensation in the sum of $600 for the tenant’s financial losses arising from the forced eviction. This sum is not inclusive of any award for non-economic loss arising from the same event.

The claim for compensation for the constructive loss of facilities and breach of quiet enjoyment arising from the overcrowding

The standard of leased premises at the start of a tenancy must comply with clause 54(1) of Schedule 1 of the Act:
(1) At the start of the tenancy, the lessor must ensure that the premises, including furniture, fittings and appliances (unless excluded from the tenancy agreement), are—
(a) fit for habitation; and
(b) reasonably clean; and
(c) in a reasonable state of repair; and
(d) reasonably secure.
The terms ‘fit for habitation’ and ‘reasonable state of repair’ have been the subject of consideration in the tenancy legislation of other jurisdictions (Anforth and Christensen, Residential Tenancies Law and Practice in NSW, (4^th ed., 2008), at [2.25.1]-[2.25.4]). The Tribunal adopts the content thereof.
These tests contain objective standards of what the wider community considers to be acceptable accommodation. It is not a question of whether an individual lessor and tenant agree to a lesser standard. Clause 54 is a term of the tenancy agreement and it is not open to the parties to contract out of its operation.
The test of habitability is a more extreme test than that of a ‘reasonable state of repair’. A house may be inhabitable by a tenant even though it is not in a reasonable state of repair, but once the house reaches the state of being uninhabitable, then further occupation of the house is not permitted and termination of the tenancy follows (clauses 86-87).
Premises are most usually found to be uninhabitable for safety reasons e.g. the danger of electrocution or rotten floor boards etc. In these cases there are laws other than tenancy laws that come into play to protect the health of the persons concerned. This is, in essence, what occurred in the present case with ACTPLA’s intervention.
But premises can be found to be uninhabitable in the absence of safety concerns even though there is no lack of repair involved. When the objective community standard approach is adopted, there comes a point where the absence of basic facilities and services in a house (which may otherwise be in an acceptable state of repair) becomes unacceptable and the house is deemed uninhabitable (Finn v Finato (2004) NSWCTTT 179). By way of example only:
(a) A functional hot water system has been held to be necessary for habitability (Adair and Lauer v Timony (1999) NSWRT 4; Kerr v Czeizler (1998) NSWRT 185; La Rosa v Tulla (1998) NSWRT 163). In Damatre v Donnelly (2005) NSWCTTT 490, the Tribunal ordered the landlord to replace a hot water system that only supplied hot water for five minutes with an 80 litre system;

(b) In Bremer v Jones Family Investment P/L (2002) NSWCTTT 195, the NSW Tribunal held that a house without a useable bathroom and toilet was uninhabitable.
In the present case, the tenant had no complaint about the habitability of the premises when he first moved into the premises back in January 2007. There were 6 bedrooms downstairs in which 6 people resided. There were two toilets and two showers available to the downstairs residents and one communal kitchen. Although this arrangement may not be everyone’s preferred option, it is probably not so extreme as to render the premises uninhabitable at that time.
By the time ACTPLA evicted the tenants on 14 July 2010, the overcrowding, summarised at paragraph 38 above, was such that, by any objective community standard, the premises were uninhabitable.
Between January 2007 and July 2010, the conditions in the house evolved from being acceptable to being uninhabitable due to overcrowding. As this overcrowding evolved, the tenant’s petition for services and facilities and his quiet enjoyment of the premises deteriorated. By the time the house was uninhabitable, the tenant’s enjoyment of the services, facilities and premises generally was almost totally compromised.
A tenant’s quiet enjoyment of premises (including the services and facilities) can be infringed without the premises being uninhabitable, but uninhabitability will inevitable impinge on the tenant’s use of the premises as a whole.
Somewhere, in the course of the evolution of numbers in the house, but short of the point at which the house became uninhabitable, the point was reached where the extent of compromise to the tenant’s use of the premises was a breach of
clause 52. The problem for the Tribunal is to determine that point in time on the evidence before it.
The Tribunal approached the matter by attempting to ascertain the earliest date at which the premises became uninhabitable, as this would set the outer limit for the date at which a breach of clause 52 would exist. It was plain that the house was uninhabitable by 14 July 2010, but this does not mean that it was not uninhabitable prior to this date. The Tribunal pressed the parties for assistance on this issue but little was forthcoming. Ultimately, this factual issue was one for the tenant to deal with as part of his claim for compensation.
From the evidence, it seems that the increase in bedrooms and tenant numbers started to occur about a year after the tenant took occupation i.e. about
January 2008. The number rose from 8 to about 30 over a period of about 18 months. All but three of these residents were downstairs, or in the garage, or caravan and thus, shared the downstairs facilities. In Canberra, it would be considered unusual to have only one toilet and one shower for a four bedroom house in which 4-6 people may reside. This would be approaching the point beyond which the ratio of residents to basic facility would be unacceptable. When the tenant first moved into the house, the downstairs arrangements were already close to this ratio. When the additional bedrooms were added downstairs and the garage and caravan were introduced into the equation, the balance tipped and the ratio was unacceptable. But when was this? There is simply no evidence on the point and any finding by the Tribunal would be entirely a guess. Guesses are not evidence.
Not without some reluctance, the Tribunal finds that the earliest point of uninhabitability discernable from the evidence is the concession made by the lessor’s counsel, that the maximum number of residents had been reached several weeks prior to the 14 July 2010. This sets the outer limit for the date at which a breach of clause 52 had occurred.
The absence of any evidence from the tenant on the times at which conditions in the house progressively deteriorated, leaves the Tribunal with no evidence to date of the onset of the breach of clause 52 other than from the point of uninhabitability several weeks prior to the end of the tenancy.
This being the case, the part of the tenant’s claim for compensation for a constructive withdrawal of facilities arising from the overcrowding must be limited to a period of several weeks at the end of the tenancy. The Tribunal allows the equivalent of rent paid in this period, being $330.
The tenant’s for quiet enjoyment goes beyond the claim based on the constructive loss of use of services and facilities. The loss of quiet enjoyment can arise from factors other than the loss of facilities and services; e.g., noise, sleep disturbance and conflict in the house. Compensation for these factors must also be assessed.
The lessor owes the tenant a duty to take all reasonable action to restrain the conduct of the lessor’s other residents in the house where that conduct is breaching the tenant’s right to quiet enjoyment of his tenancy (Anforth and Christensen, Residential Tenancies Law and Practice in NSW, (4^th ed., 2008) at [2.22.2]). The duty owed by the lessor is one of strict liability (Anforth and Christensen, Residential Tenancies Law and Practice in NSW, (4^th ed., 2008), at [2.22.1]).
The fact that the people in the house were disturbing each other, even if unintentionally, is a foreseeable and inevitable consequence of the lessor’s decision to allow so many people to live in such close proximity. The fact that the police were called at one point is not surprising.
The problem that again confronts the Tribunal, is the absence of evidence on the timing of these events. Again, the earliest point in time for which there is any evidential basis arises from the lessor’s concession concerning the last several weeks. The Tribunal allows a further $300 for the breach of quiet enjoyment arising from noise, sleep disturbances and conflicts over the last 3 weeks of the tenancy.
The lessor contended that any compensation awarded to the tenant for breach of quiet enjoyment should be reduced by reason of the tenant’s failure to mitigate his losses by moving out of the house (section 38 of the Act).
The Tribunal adopts the understanding of the tenant’s duty to mitigate his losses set out at Anforth and Christensen, Residential Tenancies Law and Practice in NSW, (4^th ed., 2008), at [2.15.0]).
In other circumstances, there would be considerable force in the lessor’s submissions. A periodic tenant who is unhappy in his tenancy has the right to move on giving three weeks’ notice. To remain in situ and suffer an ongoing substantial disturbance to quiet enjoyment makes little sense (Rich and Ruthven v Chen (2010) NSWCTTT 25).
However, the clock only starts running on the duty to mitigate once the breach has occurred. In the present case, due to evidential problems, the breach is only dated from three weeks before the end of the tenancy. Compensation has only been calculated from this date. In these circumstances, the lessor’s submission comes down to the proposition that the tenant should have assessed his level of discontent, made enquiries, secured other accommodation and moved out within that three weeks. Even if the tenant commenced that process, it is unlikely that he would have moved door to the time as his eviction.
On the other hand, if the lessor wishes to concede that the breach of quiet enjoyment should date from an earlier time, then the compensation can be recalculated from that earlier date and the tenant’s duty to mitigate can then be taken into account.
The lessor argued that the Tribunal had no power to award compensation for distress and inconvenience arising from breach of quiet enjoyment and loss of facilities and services. Section 104(d) of the Act provides the power for the Tribunal to award ‘compensation’ for ‘any...breach of the residential tenancy agreement’.
A breach of quiet enjoyment involving the constructive withdrawal of services and facilities, sleep disturbance, noise and conflicts is a breach of the residential tenancy agreement that is able to be compensated under section 104(d).
The Tribunal adopts that which appears at Anforth and Christensen, Residential Tenancies Law and Practice in NSW,(4^th ed., 2008), at [2.16.0] [2.16.1]) to the effect that compensation is awardable for the distress and inconvenience arising from such breaches. At the end of the day, there is no other manner of compensating a tenant for the loss of the primary right that the tenant bargained for under the tenancy agreement, other than in monetary terms. The extent of the compensation must be assessed on common law principles. The common law is no stranger to assessing compensation for distress and inconvenience (without the need for any associated personal injury). By way of example only, this task is regularly undertaken in defamation matters, discrimination matters and travel holiday claims. In any event, this Tribunal and those in each of the other Australian tenancy jurisdictions, have long resolved this issue in favour of the power to award such compensation.

Refund of the electricity costs paid

The parties agreed that the Tribunal need only address the electricity issue and not the gas issue.
It was an agreed fact that the electricity account was in the name of the lessor and all electricity accounts went to the lessor.
The lessor’s evidence was that he billed the residents of the house for the electricity on a pro rata basis per bedroom.
It was the tenant’s evidence that he was never presented with a copy of the electricity account from ACTEWAGL and that he paid all sums requested of him by the lessor, even if somewhat begrudgingly at times.
The lessor did not make any profit from the electricity but he did recover the whole of the bill for the house from the tenants, including for electricity consumed in the common areas of the house over which the lessor retained the right to possession.
Clauses 42, 46 and 48 of Schedule 1 deals with the issue of who pays for electricity charges:
42. The lessor is responsible for the cost of the following:
...
(c) services for which there is not a separate metering device so that amounts consumed during the period of the tenancy cannot be accurately decided;

(d) all services up to the time of measurement or reading at the beginning of the tenancy;

(e) all services after reading or measurement at the end of the tenancy providing the tenant has not made any use of the service after the reading.
46. The tenant is responsible for all charges associated with the consumption of services supplied to the premises, including electricity, gas, water and telephone.
48(1) The lessor is responsible for undertaking or arranging all readings or measurement of services, other than those that are connected in the name of the tenant.
(2)The lessor must provide the tenant with an opportunity to verify readings and measurements.

There was no separate metering of the electricity service to the house, garage and caravan and so it was not possible to ‘accurately decide’ the amount of electricity consumed by the tenant during the tenancy (clause 42(c)).
Mr Arthur argued that the reference to ‘separate’ metering in clause 42(c) referred only to circumstances where the lessor and the tenant occupied premises running off the same electricity meter and did not apply in cases where the whole of the premises were occupied by separate tenants. Mr Arthur was clear that his submission was not directed to the circumstances of one joint tenancy in a house but covered the circumstances where there was a multiplicity of separate tenancies in the one house, such as in the present case.
He pointed out the virtual impossibility of installing meters to record the amount of electricity used in separate bedrooms relative to the electricity used in the common areas and, the further impossibility of dissecting the electricity used in the common areas per tenant.
The Tribunal is not attracted to his argument for several reasons.
First, clause 42(c) focuses on the contractual relationship between the lessor and the particular tenant. That tenancy relationship may arise in the context of a house with a multiplicity of tenancies such as in the present case, but
clause 42(c) must also cover the more common tenancy arrangements as well. The wording of the clause itself appears in the context of an individual tenancy agreement. It is simply saying that, if the lessor wants the tenant to pay the electricity, then there has to be separate metering to the tenanted premises that permit the ‘accurate’ determination of the amount of electricity consumed by the tenant.
Mr Arthur’s submission would permit a lessor to impose on a tenant, the cost of the electricity consumed by an unrelated third party who was a separate tenant of the same lessor. It seems to the Tribunal most unlikely that the Legislative Assembly intended such an unjust arrangement.
The second reason that the Tribunal rejects Mr Arthur’s submission is on the basis of long standing jurisprudence. This Tribunal and those of other jurisdictions, have long taken the view that separate metering of the tenanted property is required in order to impose liability for the electricity cost on the tenant (Anforth and Christensen, Residential Tenancies Law and Practice in NSW, (4^th ed., 2008), at [2.19.0]).
The third reason that the Tribunal rejects Mr Arthur’s submission, is because it implicitly wrongly assumes that there is no other means for the lessor to recover the cost of the electricity consumed by the tenants. There is nothing to prevent a lessor from factoring the cost of the electricity into the rent, whether this is the initial rent or any subsequent rent increase after the tenancy has commenced.
It follows from clause 42(c) that the tenant is not contractually bound to pay the electricity costs.
The Tribunal explored with the parties at the hearing whether there was any other basis in law that would impose a duty on the tenant to pay for the electricity he consumed. There are good social and environmental reasons why nobody, including tenants, should be permitted to consume electricity with impunity as to its commercial and environment costs. The Tribunal raised for discussion a quantum meruit basis for such a power.
Mr Arthur contended that whilst the lessor may not have been able to compel the tenant to pay the electricity charges and it would not have been a breach of the tenancy agreement had the tenant simply refused to pay, the rules of the legal game change once the tenant in fact voluntarily pays the electricity cost levied on him by the lessor and the tenant had no right to recover that payment from the lessor.
Mr Arthur took the Tribunal to Ovidio Carrideo Nominees P/L v The Dog Depot P/L [2006] VSCA 6. This matter concerned a commercial lease in Victoria. The tenant entered into a commercial tenancy agreement and paid rent. Only later did the tenant become aware that under the governing legislation he could have withheld the rent payments up to the point in time that the landlord provided a disclosure statement. The tenant sued for the rent that had been paid under a mistake of fact and law, namely the rent that was not payable under the lease until the disclosure statement was provided.
The matter found its way to the Victorian Court of Appeal constituted by Chernov JA, Nettle and Astley JJA. The leading judgment was that of
Chernov JA with whom the other justices concurred with varying amplification of issues.
Chernov JA concluded from the authorities, that monies paid by a party under a mistake of fact or law are prima facie recoverable by that party in an action for restitution based on the unjust enrichment of the receiver of the money (Pavey & Mathews P/L v Paul (1986) 162 CLR 221; Roxborough v Rothsman of Pall Mall Australia Ltd (2001) 208 CLR 516; David Securities P/L v Commonwealth Bank of Australia (1992) 175 CLR 353). The right to claim for recovery was said to arise in equity and did not to arise from the contract under which the wrongful payment was made.
Chernov JA held that a prima facie obligation to refund the monies wrongly paid, could be rebutted where there was no unconscionability in the retention of the money by its recipient:
20 Although it may be said that the principles of restitutionary relief have not yet been exhaustively or definitely stated by the High Court (which is unsurprising given the nature of the remedy) there is, nevertheless, guidance that is apparent in the authorities to which I have referred as to when such relief is available and, in particular, what may constitute a good defence to a claim for money paid under a mistake. As I understand the cases, once a prima facie entitlement to restitution is made out by the payer, it is for the payee to show that it would not be unjust or unconscionable for it to retain the money if the payer is to be denied restitutionary relief. Thus, in those circumstances, it is for the respondent to demonstrate, for example, that it has given good consideration for the payment. Whether it had done so is to be judged from the perspective of the payer, in this case, the tenant. Moreover, in a context such as the present, it would also be relevant, I think, to consider whether the respondent has a "counter restitutionary" claim against the payer for use and occupation of the premises.
21 As I have said, I consider that the landlord has a good defence to the tenant’s restitutionary claim and that is because, broadly, it seems to me, it would not be unjust or unconscionable for it to retain the money in question notwithstanding that it was paid under a genuine mistake. I say this for the following reasons. First, I think that, unlike the position of the payers in David Securities and Roxborough, the tenant here has received good consideration for the money it paid, namely, exclusive possession of the premises that were obviously of use and benefit to it, as is demonstrated not only by the fact that it occupied them since entry for its business purposes, but also by its continued possession of them after it became entitled to terminate the lease pursuant to s.8(2)(c) of the Act. And it is irrelevant that the landlord might have been under an obligation to provide the premises under the lease. The question is not whether the landlord was under such an obligation, but rather whether the tenant gained or accepted a benefit in the form of exclusive use of the premises (as a quid pro quo for the payments in question). As I have said, on the evidence, it is apparent that the tenant received such a benefit and, thus, from its point of view, it received good consideration for its payments. Moreover, it has not been suggested that the contents of the disclosure statement had any relevant bearing on the benefit that the tenant secured under the lease. For instance, there was no suggestion that the statement revealed that the premises, or any matter relating to them, have been misdescribed in the lease, or during the negotiations leading to its execution, such that it would now be unconscionable for the landlord to retain the money.
22 The second, and additional, reason for my conclusion that it would not be unjust for the landlord to retain the money notwithstanding that it was paid under mistake is that I consider that the landlord has a sound claim against the tenant for use and occupation of the premises for the relevant period, in an amount broadly equal to the rent reserved under the lease. As is explained in Woodfall’s Laws of Landlord and Tenant, a restitutionary claim based on use and occupation arises where the respondent has been given permission by the claimant to occupy its land without there being any binding term as to payment. The essential elements of this cause of action were described in Australia Provincial Assurance Association Ltd v. Rogers and Zegir v. Woop, in slightly different terms, namely, the existence of an agreement between the parties – express or implied – to the effect that the occupant/respondent will be the tenant of the claimant and shall pay for the occupation. In my view, there is no difference of substance between those tests. In any event, I think that each is made out in the present case, given the existence of the lease and lack of any suggestion by the tenant that there was an agreement that it was to occupy the premises rent free. And, in my view, there is no statutory prohibition against such a claim. It seems to me that, on its proper construction, s.8 of the Act is of a like character to that considered in Pavey, in that it merely renders the rent covenant void for the period in question. The section says nothing of the landlord’s rights at common law to compensation for use and occupation of the premises, and a prohibition depriving the landlord of such compensation cannot be implied into it. If Parliament intended to achieve that result it would have said so in terms in that section as it did, for example, in s.11 in relation to "key-money" which specifically prohibits a lessor from, amongst other matters, retaining key-money that has been paid to it. And, as has been recognised in Pavey, the landlord could establish the amount of compensation to which it was entitled for use and occupation by relying on the rental provisions in the lease as evidence of what was fair and reasonable in that regard. It is true that, ordinarily, proof by the defendant of a demise under seal will provide a good defence to a claim for use and occupation, but as Sholl, J. explained in Specktor v. Lees, the rule is predicated on the claimant being able to sue for rent on the covenant in the deed. In this case, although the lease was made under seal, as the tenant contended, the covenant to pay rent was void for the relevant period and, consequently, the ordinary rule of a deed being a good defence to a claim for use and occupation would not have operated. (emphasis added)
Nettle JA read the same authorities as going so far as to provide a defence to the return of the money wrongly paid unless there had been a ‘total failure of consideration’ to the party that made the mistaken payment.
Mr Arthur contended that the tenant had in fact received what he had bargained for, namely an electricity supply, and that fact was sufficient to rebut the claim for restitution for the electricity costs paid under a mistake of law by the tenant. It was said that it was not unconscionable for the lessor to retain the money for the electricity supplied and that there had not been a total failure of consideration to the tenant.
A claim in restitution is practically indistinguishable from a claim in quantum meruit as each of the above authorities recognised. The Tribunal itself raised this issue for consideration during the hearing.
The contention raised by Mr Arthur is not new in the tenancy jurisdiction. The issue vexed the NSW jurisdiction until the issue was expressly resolved by the enactment of section 47 of the Residential Tenancies Act 2010 (NSW),which mandates a refund of such payments.
Under the former Residential Tenancies Act 1987 (NSW), there had been some doubt as to the Tribunal’s power to order the repayment of overpayments of various kinds given the equitable nature of the remedy. In a series of decisions, the majority position was that such power implicitly existed in the breadth of the powers given to the Tribunal to resolve disputes (Brodziak v Lowrey (1996) NSWRT 14; Moore and White v Lesbian Space Inc (1997) NSWRT 154; Schofield v Carroll (1997) NSWRT 138; Hopkinson v Conaught P/L (1997) NSWRT 142; Coombe v E Cocco and Sons Investments P/L (1997) NSWRT 147; Bull v Shangri-La Caravan Park (1997) NSWRT 44, Deleiven v Department of Housing (1999) NSWRT 21; O’Donnell v Leppington Pastoral Co P/L (2001) NSWCTTT 371). For the contrary position see Parisi v Kosac (1996) NSWRT 75 and Van Haren v Cavangh (2000) NSWRT 49, where the Tribunal noted the effect of its decision would be that action to recover overpaid rent would have to be taken in the local court.
By way of example only, in Hogg v George Briffa t/as Ballina Palms Village (2001) NSWRT 21, the Tribunal ordered the repayment of water charges paid by a tenant in circumstances where the duty to make the payment under the former Act rested on the landlord.
In Jeffrey v Fitzroy Collingwood Rental Housing Association Ltd [1999] VSC 335, Harper J dealt with the case of an overpayment arising under the Rooming Houses Act 1990 (Vic) as a result of an invalid rent increase notice served by the landlord. He ordered the repayment on a basis of restitution:
37. The appellant submitted that, in paying the increases in question, he was acting under a mistake of law. Such a mistake, it is now settled, may found a claim for the recovery of the amount by which the person making the payment was over-charged: (authorities omitted)...Indeed, the claimant is prima facie entitled to recover moneys paid under a mistake if it appears that the payment was made in the unfounded belief that there was a legal obligation to pay, or that the recipient was legally entitled to the funds in question (authorities omitted)...
38. Once the plaintiff has overcome the burden of establishing on the balance of probabilities that a causative mistake has been made, the defendant will be placed under a prima facie obligation to make restitution. In short, a defendant’s prima facie liability will not be displaced unless the defendant is able to point to circumstances which were an order for restitution made, would give rise to an injustice.
39. The relevant defences were set out in a passage in the judgment of Goff, J in Barclays Bank Ltd v WJ Simms Son & Cooke (Southern) Ltd [1980] QB 677 at 695:
(1)If a person pays money to another under a mistake which causes
him to make the payment, he is prima facie entitled to recover it as money paid under a mistake.
(2)His claim may however fail if (a) the payer intends that the payee
shall have the money at all events, whether the fact be true or false, or is deemed in law so to intend; or (b) the payment is made for good consideration, in particular if the money is paid to discharge, and does discharge, a debt owed to the payee (or a principal on whose behalf he is authorised to receive the payment) by the payer or by a third party by whom he is authorised to discharge the debt; or (c) the payee has changed his position in good faith, or is deemed in law to have done so.’
42. The High Court considered, in the David Securities case, the 'change of position' defence. The majority judgment said of it, at 385–386:
‘In the jurisdictions in which it has been accepted (Canada and the United States), the defence operates in different ways but the common element in all cases is the requirement that the defendant point to expenditure or financial commitment which can be ascribed to the mistaken payment. In Canada and in some United States decisions, the defendant has been required to point to specific expenditure being incurred because of the payment. Other cases in the United States allow a wider scope to the defence, such that a defendant can rely upon it even though he or she cannot precisely identify the expenditure caused by the mistaken payments. In no jurisdiction, however, can a defendant resort to the defence of change of position where he or she has simply spent the money received on ordinary living expenses.’
...
44. In my opinion, the appeal should, to the above extent, succeed for another reason. Each of the rent increases referred to above were invalidly imposed. Being invalid, the moneys acquired by that mechanism must be returned to him (the appellant) from whom they were invalidly extracted. Questions of mistake are irrelevant. In Kiriri Cotton Co Ltd v Dewani [1960] AC 192, restitution was ordered because payment had been made pursuant to a contractual obligation rendered void by statute. In Woolwich Building Society v Inland Revenue Commissioners [1993] AC 70, payments were made to a public authority following an ultra vires demand. There, too, restitution was ordered. In neither case was mistake the basis of the decision.
45. It would in my opinion be wrong for this Court to allow, at least as a matter of course, the retention by the charging authority of moneys obtained following an invalidly imposed rental increase. To do so in the present case would be to nullify those legislative provisions by which the invalidity is proclaimed.
If the matter were only to be determined on the basis of whether the lessor had a good defence to a restitution claim based on a payment wrongly made under a contract, then the Tribunal may be attracted to Mr Arthur’s submissions set out above. It is not unjust for a tenant to pay for the electricity they consume. The bluntness of the method used by the lessor to apportion the electricity costs may have raised questions of equity. Obviously, in cases where there was no proportionality at all between the electricity likely to have been consumed and the charges levied, then no defence to the restitution claim would arise. But in the present case, it is not all obvious that the electricity charge levied on the tenant was disproportional to his use.
But the duties imposed on lessors in the ACT are statutory in origin and any contracting out of those obligations is prohibited by the statute. If there is a statutory prohibition on the lessor receiving and retaining a payment of a particular kind, then the clearly expressed will of the legislature is the final word. This point was recognised by Chernov JA in the underlined part of this judgement set out above and was the ratio of the decision in Jeffrey.
The issue then become whether the Act does, in fact, preclude the lessor from receiving payments other than those permitted by the Act.
Clauses 42(c) and 48 set out a scheme that is clear enough on its face, namely that the electricity charges in the present circumstances are the lessor’s cost and not the tenant’s. It is not open to the parties to come to some contrary arrangement, that is, there is no freedom to contract on this point.
Clauses 42(c) and 48 do not explicit say that the lessor must not ‘receive’ payments for electricity. Section 15 of the Act, however, is framed in terms of payments that the lessor may ‘require’ or ‘accept’:
(1) In consideration for giving a tenant a right to occupy premises, a lessor may only require or accept rent or a bond
(2) A lessor must not require or accept any consideration for—
(a) agreeing to enter into, extend or renew a residential tenancy agreement; or ..
Section 15 is framed in mandatory terms. It refers to ‘any consideration’ received by a lessor as part of the tenancy agreement. The term ‘consideration’ includes the receipt of money from the tenant to defray the lessor’s liability under the Act for the unmetered electricity charges.

Section 15(1) limits the consideration that the lessor may require or receive, to the rent and the bond. No other form of consideration is permitted.
The only other form of payment that the Act addresses is holding deposits. Section 18(1) precludes the lessor from either requiring or accepting holding deposits.
The legislative intention appears to be to preclude any money or other form of consideration being either required or received from a tenant other than rent and bond. This would preclude either requiring or receiving money for the lessor’s electricity accounts. The lessor has two methods by which he can obtain reimbursement of the electricity accounts:
(a) he can factor it into the rents
(b) he can have the tenants contract directly with ACTEWAGL, i.e. the
electricity account would in the tenants’ names.
The lessor’s actions in requiring the tenant to pay the electricity charge and in receiving the payment, are each unlawful actions in breach of section 15. In terms of the defences to a restitution claim, it cannot possibly be just or equitable to permit the lessor to rely upon and benefit from his unlawful action.
Similarly, a claim by the lessor in quantum merit cannot stand in the face of a statutory prohibition on the electricity charge.
Accordingly, the lessor has no defence to the restitution claim and is to refund the whole of the electricity charges levied on the tenant, agreed in the sum of $2600.
The Tribunal wishes to add the caveat that nothing in this decision should be taken as endorsing the principle that tenants should not be held responsible for their own use of electricity. The Tribunal is constrained by the terms of the Act and had the Act so permitted, the Tribunal would have entertained a quantum meruit claim from the lessor and endeavoured to assess the amount of electricity reasonably attributable to the tenant’s use.
The lessor in this case has sought to set up what is, in essence, a boarding house. Some jurisdictions have legislation that expressly regulates boarding houses. The ACT does not. The facts of this case are extreme but it is easy to envisage less extreme circumstances in which such de facto boarding house arrangements may not infringe the health and habitability test that led to government intervention in this cased. What, for example, if there were 15 people in a three bedroom house? How much crowding is acceptable in this community? This issue may benefit from the attention of the executive and legislature.

Decision:

The lessor is to the pay the tenant the following sums within 28 days:
(i)for economic loss arising from a breach of clause 51 - $600; and,
(ii)for non-economic loss for breach of clauses 51 and 52 - $630; and,
(iii)refund of the electricity charges - $2600.
being a total of $3830.

………………………………..

Mr A.Anforth
Senior Member