Dangar & Anor v Mansour & Anor (Residential Tenancies) - [2016] ACAT 61

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

DANGAR & ANOR v MANSOUR & ANOR (Residential Tenancies) [2016] ACAT 61

RT 234/2016
Catchwords: RESIDENTIAL TENANCIES – compensation – leased premises not a valid address

Legislation cited: Residential Tenancies Act 1997 ss 6A, 83, standard terms 51, 52

Cases cited: Aussie Traveller P/L v Marklea P/L [1997] QCA 2

Danny Pearson & Cheryl Pearson v Commissioner for Housing in the ACT [2007] ACTRTT 25
Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185
Ingram v Department of Housing (Tenancy) [2002] NSWCTTT 84
Mullins v Pace (1998) NSWRT 251
Sampson v Floyd [1989] 33 EG 41
Worrall v Commissioner for Housing in the ACT [2002] FCA 127

Tribunal: Senior Member J Lennard

Date of Orders:  7 April 2016
Date of Reasons for Decision:         8 June 2016
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL)      RT 234/2016
BETWEEN:
HEMALKUMAR DANGAR AND VANITABEN PRAJAPATI
Applicant

AND:
AIMEN MANSOUR AND MARIHAN MANSOUR
Respondent

TRIBUNAL: Senior Member J Lennard

DATE:7 April 2016
ORDER

Tenancy shall terminate at midnight on 25 April 2016.
Final inspection shall be conducted at 10.00am on 26 April 2016. Keys shall be returned by tenants to the lessors’ agent at that final inspection.
Lessors shall pay to the tenants the amount of $4800.00 being compensation for breach of contract, on or before 25 April 2016
Balance of application relating to rental bond is adjourned to a preliminary conference on Tuesday 10 May 2016 at 2.00pm

……………signed………..
Senior Member J Lennard

REASONS FOR DECISION

The parties entered into a residential tenancy agreement on 23 November 2015 for premises, the address of which was described as 9 Katie Stow Lane, Franklin. The weekly rent was $370 and the term was 12 months. The residence is also known as 77B Gwen Meredith Loop, Franklin.
The evidence before the Tribunal established that the premises were approved by the ACT Planning and Land Authority [ACTPLA] as a single dwelling. The correct and proper address of that single dwelling is 77 Gwen Meredith Loop, Franklin. The dwelling has never been approved as two separate residences.
The lessors have entered into two residential tenancy agreements in relation to the dwelling. The applicants, pursuant to the agreement described in paragraph 1 above, are tenants of the upstairs portion of the dwelling. The downstairs portion of the dwelling has been rented to other persons as tenants. [The downstairs tenants].
The evidence before the Tribunal established that the applicants as tenants had encountered problems as a result of the lessors’ actions which effectively divided one dwelling into two separate dwellings or residences.
The problems encountered by the applicants are summarised as follows:
(a)Australia Post will not deliver mail to the address 77B Gwen Meredith Loop, Franklin. The applicants gave oral evidence that they were not having mail delivered. The lessors confirmed that they were not able to arrange Australia Post to deliver to that address. The lessors suggested that the tenants either amend their address to 77 Gwen Meredith Loop, Franklin in which case Australia Post would deliver but only to a letterbox shared with the downstairs tenants; or that the lessor would pay the cost of a P.O. Box. The tenants rejected the first solution, because they would not be able to receive private and personal mail without the downstairs tenants being able to see and possibly examine it. The tenants rejected the second solution as inconvenient.
(b)The tenants also gave oral evidence that they needed to be able to supply a valid address to third parties, such as insurance companies. Without a valid address the tenants were not able to obtain insurance coverage for their contents and motor vehicle.
(c)The tenants were not able to arrange for the connection of internet and telephone services to their residence. The lessors gave evidence, which was conceded by the applicants, that it was possible to connect up to six phone lines and for internet connections from the NBN box at the property. However the tenants gave evidence that the providers of internet and telephone services had refused to connect these services because the applicants were not able to provide a valid address. In their written application the tenant stated:
After trying to get phone line and Internet connection by myself, by contacting various service providers, I found out that none of the providers can allocate service to me. The reason was “None of the providers are able to find the property I am living in.”
(d)The building, though rented as two separate residences, has only one distinct heating and cooling system. This was by way of a ducted heating and cooling air conditioning system. There was only one control unit for the entire building. The lessors proposed changing the method of air-conditioning and installing a split system to the applicants premises. The tenants objected to this on the basis that the removal of the ducted heating and cooling system and the installation of a split system would cause undue disruption to their living arrangements. In correspondence between the parties, the tenants stated that they did not agree with these changes as when they had entered into the agreement no mention had been made of these changes and that a ducted heating and cooling system had been one of the reasons for entering into the residential tenancy agreement.
(e)The tenants expressed concern in relation to further problems that may result from having no proper, correct, legitimate or registered address. Of particular concern was the prospect that the address would not be able to be located by fire, ambulance or police in an emergency.
Ms Faulder, representing the applicants made the following oral submissions:
So the applicants are seeking ... termination of the tenancy agreement... refund of the rent paid for the duration of the tenancy, payment of the internet, the costs of the internet usage and payment of moving costs. It’s on the basis ...that there was a legal impediment for the lessor entering into a tenancy agreement over the property 77B Gwen Meredith Loop in Franklin. 77B Gwen Meredith Loop and 9 Katie Stow Lane in Franklin, in effect don’t exist. They’re not registered properties. The only registered property is 77 and there’s no record with ACTPLA or the elsewhere of 77B.
...77B doesn’t exist and therefore it’s not recognised. Australia Post won’t deliver mail. It’s not recognised - it wasn’t recognised by the car insurance - the insurer. They can’t connect up their internet because all those - those services rely obviously on a system that means - they’re all identified and registered from parcels of land and this isn’t. This is a - it’s the upstairs of a property - so it’s not a separate dwelling. It’s the upstairs part of the property.
Its only original floor plan for the property is identified as a retreat - for the parents teenagers, or whatever. It does have a separate entrance but it is not and I suspect never would be 77B and there, I understand that the lessors’ representative who has made some submissions - written submissions - indicated to the effect that a tenancy - any number of tenancy agreements could be granted over a property and this isn’t - that’s not quibbled with. You could grant any number of agreements over a property but they would all be called “77”. And 77B - this property was advertised as 77B.[1]
[1] Transcript of Proceedings 7 April 2016 pages 2-3
The application was made on the basis that there was a legal impediment to the lessor entering into a residential tenancy agreement in relation to the address at 77b Gwen Meredith Loop. Clause 51 of the standard terms of residential tenancy agreements, found in Schedule 1 to the Residential Tenancies Act 1997 [RT Act] provides that the lessor guarantees that there is no legal impediment to the use of the premises for residential purposes by the tenant. The lessors conceded that the building was approved as a single dwelling and had not been approved by ACTPLA for use as two dwellings or in any form of dual occupancy. I am satisfied that there was a legal impediment to the use of the premises as two separate dwellings. The lessors are therefore in breach of clause 51 of the residential tenancy agreement.
Clause 52 of the standard terms provides that the lessor must not cause or permit any interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises. A residential tenancy agreement is defined in section 6A of the RT Act as an agreement where the lessor gives the tenant a right to occupy stated premises if the premises are for the tenant to use as a home and the right is given for value.
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.[2] In Conteh & Fan the tribunal formed the view that the constructive withdrawal of utilities and services would amount to interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises.
[2] Conteh & Fan (Residential Tenancies) [2011] ACAT 45
Quiet enjoyment is the legal concept of a tenant being entitled to hold the premises and use them for normal residential purposes without interference. It is a right in the tenant to enjoy the premises for all usual purposes free from interference. The RT Act provides that under a residential tenancy agreement the premises are for the tenant to use as a home.[3] This would encompass the notion of reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises,[4] and would include, but is not confined to, the right to prevent others from entering the premises, the right to prevent others from damaging the premises, and the right to use the house and surrounding gardens for relaxation and enjoyment.
[3] Section 6A
[4] Clause 52
Traditionally the covenant for quiet enjoyment protected the tenant from direct interference by the lessor. However, recent decisions and legislative reforms have extended the types of interference from which a lessor is obliged to protect a tenant. The quiet enjoyment of premises is interfered with if the tenant’s ordinary and lawful use and enjoyment of the premises is substantially or materially disturbed. It is not necessary that the physical possession of the premises by the tenant be interrupted. The breach does not have to render the premises entirely unfit. It is enough if the premises are materially less fit for use for their ordinary or usual purposes.[5] Interference may be by act or omission. Interference with quiet enjoyment is a question of fact.
[5] Ingram v Department of Housing (Tenancy) [2002] NSWCTTT 84
A wide range of conduct has been found to amount to interference with quiet enjoyment: failure to carry out repairs[6]; carrying out of repairs[7]; violent and abusive behaviour[8]; noise alone[9] and failure by the lessor to take steps to prevent others from causing interference with quiet enjoyment.[10]
[6] Mullins v Pace (1998) NSWRT 251
[7] Worrall v Commissioner for Housing in the ACT [2002] FCAFC 127
[8] Sampson v Floyd [1989] 33 EG 41
[9] Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185
[10] Aussie Traveller P/L v Marklea P/L, [1997] QCA 2
The tenants right to quiet enjoyment arises out of their use of residential premises, and the interference must be one that involves the use of the residential premises leased to them by the lessor.
The breach of the covenant for quiet enjoyment or nuisance must involve an interference with the use of land. Traditionally, such interference arose by way of, for example, noise, smoke, pollution, sawdust, escaping water, fire, and so on. Personal discomfort is not actionable per se, unless it arises out of the use of the land. Personal discomfort may give rise to other causes of action, such as assault or negligence.[11] Personal discomfort may be caused by being prevented, through the conduct of neighbours, from being able to make full use of premises or land. The definition of ‘premises’ as set out in the RT Act includes land and part of any premises.[12]
[11] Ingram v Department of Housing (Tenancy) [2002] NSWCTTT 84 at page 28
[12] See for a fuller discussion Danny Pearson & Cheryl Pearson –v- Commissioner for Housing in the ACT [2007] ACTRTT 25
The tenants are unable to obtain full use of the upstairs part of the building as residential premises. This is because the tenants are not able to obtain the full benefit of the bargain:
(a)they are unable to have the phone and internet connected;
(b)they are unable to obtain insurance;
(c)they are unable to have mail delivered; and
(d)have ongoing concerns as to whether in an emergency the appropriate services would be able to locate them.
The accumulation of those factors amount to interference with quiet enjoyment or peace, comfort, security and privacy. Even though the building might be a really nice place, with really good facilities otherwise and even though it might be possible to overcome some of the problems such as the heating and cooling, it is not possible without a valid and recognised address, to overcome those emergency services, mail delivery, insurance and internet and phone problems.
The result of the lessors’ conduct in entering into a residential tenancy agreement in relation to what was essentially the upstairs part of a discreet dwelling has meant that the lessors have not delivered to the tenants premises of which they could have full and appropriate use as a home. The lessors are in breach of clause 52 of the residential tenancy agreement.
The breach by the lessor of clauses 51 and 52 are serious breaches of fundamental terms of the contract. The applicants are entitled to an order terminating the residential tenancy agreement.
Section 83 of the RT Act provides that ACAT may make an order requiring the payment of compensation for “... any other loss caused by the breach of a residential tenancy agreement.”
The tenants have sought a refund of rent paid since the commencement of the residential tenancy agreement. The Tribunal takes into account that the tenant has had some benefit from the agreement – all utilities have been at no cost to the tenants, and they have had a place to stay, albeit in difficult circumstances. The tenants have however paid a total of $6660. The Tribunal determined that the tenants would be entitled to a refund of a portion of the rent paid as a result of the breach of clause 51 of the residential tenancy agreement and awarded an amount of $100 refund for each of the 18 weeks of the agreement – a total of $1800.
Where the lessor has breached clause 52 and caused direct or indirect interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises, the tenants are entitled to compensation. In this instance, the tenants have been unable to make full and proper use of the residence as their home, and the lessors are not in a position to remedy the breach. The Tribunal takes into account the distress, inconvenience and lack of peace, comfort and privacy that they have suffered over an 18 week period. The Tribunal also takes into account that the lessors through their agent responded inappropriately by characterising the tenants’ desire to terminate the tenancy, as a break lease. The Tribunal also takes into account that the tenants will incur the costs of moving and the inconvenience of hunting for a new home much sooner than they would have, but for the breach by the lessors. I have determined that the lessor shall pay the tenants compensation in the amount of $3000.
………………………………..
Senior Member J Lennard
HEARING DETAILS

FILE NUMBER:	RT 234/2016
PARTIES, APPLICANT:	Hemalkumar Dangar, Vanitaben Prajapati
PARTIES, RESPONDENT:	Aimen Mansour, Marihan Mansour
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Vanessa Faulder, ACT Tenants Union
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member J Lennard
DATES OF HEARING:	7 April 2016