Danny Pearson & Cheryl Pearson v Commissioner for Housing in the Act
[2007] ACTRTT 25
•19 November 2007
AUSTRALIAN CAPITAL TERRITORY
RESIDENTIAL TENANCIES TRIBUNAL
CITATION:DANNY PEARSON & CHERYL PEARSON –v- COMMISSIONER FOR HOUSING IN THE ACT [2007] ACTRTT 25
RT 2359 of 2006
Catchwords: Compensation, breach of covenant for quiet enjoyment.
Issues:Breach of covenant for quiet enjoyment.
Conduct of neighbouring lessee of common lessor.
Liability of lessor for specific damage caused by action of tenant.
Liability of lessor for compensation for breach of Residential Tenancy Agreement.
Legislation:Residential Tenancies Act 1997 (ACT)
Sections: 6A; 104 (d);
Prescribed terms: 52;70;73.
Cases cited:Project Blue Moon Pty Limited v Fairway Trading Pty Limited, ACTTT 139 of 1998 and 243 of 1998 (16 April 1999);
Aussie Traveller P/L v Marklea P/L,(1997) QCA 2 (11 February 1997).
Hawkesbury Nominees P/L v Battik P/L, (2000) FCA 185 (1 March 2000).
Mullins v Pace (1998) NSWRT 251;
Worrall v Commissioner for Housing in the ACT (2002) FCA 127;
Sampson v Floyd (1989) 33 EG 41
Ingram v Department of Housing (Tenancy) (2002) NSWCTT 84 (8 May 2002).
Hadley v Baxendale (1854) 9 Exch 341
Robinson v Harman (1848) 1 Exch 850
Northern Sanblasting Pty Ltd v Harris (1997) 188 CLR 313
Elliot v Nanda (2001) 111 FCR 240
Department of Housing v Consumer, Trader and Tenancy Tribunal & Ingram (2003) NSWSC 150
Tribunal:Ms J Lennard, Member
Date: 19th November 2007
AUSTRALIAN CAPITAL TERRITORY
RESIDENTIAL TENANCIES TRIBUNAL ) NO: RT 2359 of 2006
RE: DANNY PEARSON & CHERYL PEARSON
(Applicant/Tenant)
AND:COMMISSIONER FOR HOUSING IN THE ACT
(Respondent/Lessor)
DECISION
Tribunal : Ms J Lennard, Member
Date : 30 March 2007
Decision : 19 November 2007
That the respondent – Commissioner for Housing in the ACT, is to pay an amount of $16,500.00 to the Applicants – Danny Pearson & Cheryl Pearson, within 7 days of the date of this Order.
…………………………….
Member
AUSTRALIAN CAPITAL TERRITORY )
RESIDENTIAL TENANCIES TRIBUNAL ) NO: RT 2359 of 2006
RE:DANNY PEARSON & CHERYL PEARSON
(Applicant/Tenants)
AND: COMMISSIONER FOR ` HOUSING IN THE ACT
(Respondent/Lessor)
REASONS FOR DECISION
19 November 2007 Ms J Lennard, Member
Re: Premises at 7/5 Tennison-Woods Circuit, Bonython ACT
BACKGROUND
The Respondent is the lessor and the Applicants are the tenants of premises at 7/5 Tennison-Woods Circuit, Bonython ACT. The Residential Tenancy Agreement between the parties in relation to those premises commenced in December 1995.
Rick Kennedy and Elizabeth Daniels are residents of a neighbouring property, 8/5 Tennison-Woods Circuit, Bonython ACT. The Respondent is the lessor of that property. Rick Kennedy and Elizabeth Daniels and their nine children have lived in their premises from about January 2005. Ms Elizabeth Daniels is the tenant. Residential Tenancies Tribunal notes that not all of the children live in the premises all of the time, and that for a period of time the children had been removed from the premises by child protection.
The Applicants made application to the Residential Tenancies Tribunal on 23 November 2006, for damages for breach of contract by the Respondent, constituted by the lessor’s failure to prevent conduct by the Daniels and their family that interfered with the quiet enjoyment of their own premises by the Applicants, and relocation to another premises. The written application specified damages as the cost of veterinary services following the deliberate injury of their dog by one of their neighbour’s children. The Residential Tenancies Tribunal pointed out to the tenants that compensation could only be awarded where the Residential Tenancies Act 1997 specifically provided for it. The Applicants then broadened their application to ask for compensation for breach of the ACT Housing’s obligation as lessor to ensure quiet enjoyment of their premises. No specific amount or basis for compensation was put forward.
The Residential Tenancies Tribunal does not have jurisdiction in relation to relocation of ACT Housing tenants and so the matter is confined to the application for damages for breach by the lessor of the Residential Tenancy Agreement.
A series of directions hearings and subpoenas for ACT Housing and Police documents relating to the complaints made in relation to the tenants of 8/5 Tennison-Woods Circuit, Bonython ACT, followed. On 30 March 2007, the Residential Tenancies Tribunal adjourned the matter for a written decision.
Mr and Mrs Pearson were for the early part of the proceedings represented by Mr John O’Keefe, solicitor, Mr Pearson appeared on his own behalf at the hearing conducted on 30 March 2007. Mr D.R. Jarvis of Counsel and Ms Knox, ACT Government Solicitor’s office, represented the Respondent. The Residential Tenancies Tribunal in accordance with section 98(1) of the Residential Tenancies Act 1997, endeavoured to assist the Pearsons in the presentation of their case.
EVIDENCE AND SUBMISSIONS BY PARTIES
At the hearing on 30 March 2007 Mr Pearson gave evidence that he and his wife were constantly disturbed by the conduct of their neighbours, the Daniels/Kennedy family. This disturbance took the form of, inter alia:
i) Children running across the roof of the Pearson’s home;
ii) Children spraying Mr Pearson’s car with green paint, while it was parked in his driveway;
iii) Children entering his property and removing flowers and tanbark from his garden – these were thrown onto the road;
iv) Children setting the fence between the two premises alight;
v) Geoffrey Daniels, the child of the tenant, entered the Pearson’s premises and caused deliberate injury to their pet dog. Such injuries resulted in the dog being put down;
vi) The tenant threatening the life of Mrs Pearson;
vii) Constant loud noise emanating from 8/5 Tennison-Woods Circuit, Bonython ACT, such noise either:
(1)took the form of abusive language and shouting and other noise from generally violent domestic disputes between the tenant and/or her children and Mr Kennedy, or,
(2)was loud and aggressive, often foul or obscene shouting from persons who were intoxicated.
Mr Pearson stated that he had been forced to bring the matter before the Residential Tenancies Tribunal as a result of ACT Housing’s failure to take any action against the occupants of 8/5 Tennison-Woods Circuit, Bonython ACT, despite many complaints being made by Mr and Mrs Pearson and other residents of the complex. Mr Pearson gave evidence that he had made the first complaint about the conduct of the Daniels’ children to ACT Housing in October 2005.
Mrs Pearson did not attend the hearing on 30 March 2007, the Residential Tenancies Tribunal was informed by Mr Daniels that his wife was upset and made ill by the stress caused by the conduct of the occupants of 8/5 Tennison-Woods Circuit, Bonython ACT, and of appearing before the Residential Tenancies Tribunal. Mrs Pearson made a written submission to the Residential Tenancies Tribunal; this was received on 10 April 2007. In this submission she states:
a)The Daniels and their extended family have terrorized and intimidated myself and other tenants of the complex.
b)That since making a written complaint to ACT Housing with regards to the injury to and subsequent death of her dog she has had violent and threatening behaviour from Libby Daniels to the stage that we were forced to take out a restraining order to protect ourselves.
c)Our lives have changed I do not enjoy the normal activities of life gardening having friends and family visit…my grandchildren are no longer able to visit.
Mr and Mrs Pearson make, in their written application a claim for compensation for the cost of the vet’s fees associated with the treatment and euthanising of their dog, Bindi. At the original hearing the Residential Tenancies Tribunal accepted that the Applicants had enlarged their claim and now sought an amount of money as general compensation for breach of the ACT Housing’s obligation as lessor to ensure quiet enjoyment of their premises. No specific amount or basis for compensation was put forward. Mr Pearson stated to the Residential Tenancies Tribunal that ACT Housing should pay because they had been warned and had failed to act to protect his and his wife’s right to enjoy their property.
Mr Jarvis made written submissions on 26 March 2007 and expanded upon these by oral submissions to the Residential Tenancies Tribunal on 30 March 2007. These submissions may be summarised as follows:
a)That the lessor’s obligations include an obligation not to cause or permit interference with the tenant’s quiet enjoyment of the property. The lessor may ‘permit’ an interference if the lessor fails to take lawful action to stop an interference that is occurring.
b)That the lessor’s obligations do not entail any general obligation to control the behaviour of the offending tenant, her family or associates.
c)That the lessor has complied with all obligations to allow quiet enjoyment by issuing a Notice to Remedy on 21 January 2006 and 24 November 2006 and a Notice to Vacate on 25 January 2007.
d)That the lessor did not cause or permit the conduct alleged to constitute interference with the Pearson’s quiet enjoyment because the lessor has not authorised the conduct and/ or the lessor has taken all practicable lawful steps to abate the nuisance by issuing the notices referred to above.
e)That the specific damages claimed by the Pearsons are not losses caused by the lessor’s breach and the Residential Tenancies Tribunal has no power to compensate a tenant for the wrongful acts of other tenants [of the lessor].
The Residential Tenancies Tribunal received both oral and written statements form Ms Jeanette Kosalka, Acting Manager Southern Regions, Housing ACT. In the course of her duties Ms Kosalka had some dealings with Elizabeth Daniels. The evidence of Ms Kosalka may be summarised as follows:
a)The first complaint made to ACT Housing in relation to the conduct of Ms Daniels’ children was on 7 October 2005. This complaint concerned the lack of supervision of the children and the children’s abusive behaviour directed at other residents of the complex known as Bellbird Gardens.
b)On 20 December 2006 Ms Kosalka met with the Applicants and two other residents of the complex. Each person made complaints about the behaviour of Ms Daniels, visitors to her premises and particularly the behaviour of her children. Ms Kosalka noted that none of the complainants wished to be identified for fear of reprisals by Ms Daniels.
c)That the lessor served a Notice to Vacate on Ms Daniels on 25 January 2007. This Notice to Vacate was based upon Ms Daniels’ failure to remedy the breaches outline in the Notices to Remedy served in January 2005 and November 2006.
d)Ms Daniels lodged an internal appeal for review of the Notice to Vacate and that appeal was successful.
e)ACT Housing had stopped the process of eviction and placed Ms Daniels on a priority transfer list to relocate her to another ACT Housing property. It was expected that this would take 3 to 4 months and that once Ms Daniels has been transferred there would be no need for an eviction.
The Residential Tenancies Tribunal notes that the Respondent has not denied the conduct of the tenant of 8/5 Tennison-Woods Circuit, Bonython ACT nor that this conduct has interfered with the quiet enjoyment by the Pearsons of their premises. The submissions of the Respondent focus on a denial that they ‘caused or permitted’ the interference by the tenant of 8/5 Tennison-Woods Circuit, Bonython ACT with the quiet enjoyment by the Pearsons of their premises. The Respondent also submits that the damages claimed by the Pearsons are not caused by any breach by the Respondent of the Residential Tenancy Agreement between the Applicants and the Respondent.
The Residential Tenancies Tribunal thus has three issues to be decided:
a)Is Mrs Daniels in breach of the Residential Tenancy Agreement between herself and the Respondent ?
b)Is the Respondent in breach of the Residential Tenancy Agreement between the parties?
c)Are the Applicants entitled to recover from the Respondent compensation generally and/or for specific loss directly caused by the actions of Mrs Daniels?
The evidence obtained following subpoena
Police documents
Pursuant to a subpoena the Australian Federal Police have provided 25 incident reports relating to residents of 8/5 Tennison-Woods Circuit, Bonython ACT, dating from November 2005. The content of those reports is summarised as follows:
a)Complaints by persons other than occupant of or visitor to 8/5 Tennison-Woods Circuit, Bonython ACT: there are 8 of these, two made by Mr Pearson, one by Mrs Pearson and the others by residents of nearby premises.
i) All but one is a complaint of a disturbance in or near 8/5 Tennison-Woods Circuit, Bonython ACT. The AFP record that the persons creating the disturbance are obviously intoxicated and have made the following observations:
(a) On arrival police heard the voice of a male screaming abuse at people in the complex at 5 Tennison-Woods Circuit.
(b) Police could hear a male screaming and yelling at the top of his lungs in the area near 5 Tennison Woods.
ii) On two occasions AFP were told that a male person was armed with a knife. On one of those accessions Richard Kennedy was arrested and knives were seised. Mr Kennedy was described as ‘heavily affected by intoxicating liquor’ and as ‘yelling aggressively’.
iii) On one occasion the complaint was that a group of males was destroying the fence. Police describe Mrs Daniels as ‘highly intoxicated and after initially being calm, …verbally abusive towards police’.
iv) On 19 November 2006 police were called to 8/5 Tennison-Woods Circuit, Bonython ACT, on three occasions. The substance of the incidents was that Mrs Daniels had threatened to kill Mrs Pearson and her dogs. After the third incident Mrs Daniels was arrested for a Brach of the Peace. The AFP reported, inter alia:
(i)Ms Daniels…was identified as heavily intoxicated and extremely verbally abusive towards her neighbours from unit 7. On the second incident Ms Daniels attended the front door of unit 7 with a baseball bat in her hand. Ms Daniels then continually banged the bat on the door, while verbally abusing the residents inside.
(b) Following this incident Mr and Mrs Pearson obtained restraining orders against Mrs Daniels.
b)Complaints by persons resident at, or visiting, 8/5 Tennison Woods Circuit, Bonython ACT: there are 10 complaints made by the tenant Mrs Daniels and 5 made by here daughter Trudy Murray. The majority of these concerned verbal abuse and/or physical assault of the tenant or her daughter by Mr Kennedy. Intoxication was a factor in each of these and they were characterised by loud and abusive yelling and screaming.
ACT Housing documents.
10) Pursuant to a subpoena the Commissioner for Housing in the ACT has provided:
a)Information relating to complaints made to ACT Housing in relation to the tenancy of Elizabeth Daniels at 8/5 Tennison-Woods Circuit, Bonython ACT,
b)Information relating to complaints made to ACT Housing by Elizabeth Daniels of 8/5 Tennison-Woods Circuit, Bonython ACT,
c)Documents relating to the actions taken by ACT Housing in relation to those complaints.
11) The information contained in those documents is summarised as follows:
a)On or about 11 November 2004 the tenant, Elizabeth Daniels made application for housing assistance. Soon thereafter she was allocated premises at 8/5 Tennison-Woods Circuit, Bonython ACT.
b)Complaints made to ACT Housing and the response:
i) 8/11/2004 – 4 complaints from tenants of complex – noise, abuse, drunken behaviour and children begging from door to door – asked support worker to explains obligations to tenant.
ii) 15/01/2005 – complaint from tenant of complex - damage to property, noise, abuse, small children running around complex, inappropriate remarks to other tenants. - asked support worker to speak to tenant.
iii) 21/01/2005 - Notice to Remedy served on tenant – based on breach of clause 70.
iv) 23/05/2005 - complaint from tenant of complex – assault on her daughter by daughter of Mrs Daniels. Plus list of problems experienced since family moved to no 8 – threats, obscene language, throwing rocks. Complainant stated that her children were afraid to play outside or to walk to and from school for fear of being attacked by the children of Mrs Daniels. Letter acknowledging complaint. Recommend Conflict Resolution Service.
v) 14/07/2005 – complaint from Mr Pearson – children playing in and around bins, making the bins unavailable to tenants. Letter acknowledging complaint.
vi) 30/08/2005 – complaint by Raquel Bourne, tenant of 9/5 Tennison-Woods Circuit. Bonython. Assault upon herself and her children by Mrs Daniels and two of her daughters.
vii) 02/09/2005 – ACT Housing met with tenant to discuss complaints.
viii) 21/1/2005 & 20 /12/2005 – tenant interview - ACT Housing identifies neighbourhood opposition to Mrs Daniels and her family and supports application for transfer to a larger, free standing property.
ix) 07/10/2005 - complaint from Mr Pearson – children unsupervised, swearing and abuse of other tenants in complex, damage to property, constant visits by police. Mr Pearson also complains that the Housing Manager – Frank Bergersen has failed to deal with the complaints. Frank Bergersen is not the housing manager – passed to appropriate person.
x) 06/12/2005 – anonymous complaint – persistent loud, abusive language by males living at no 8.
xi) 30/06/2006 - complaint from Mr Pearson – noise and swearing by Mrs Daniels and her partner. – told it is not housing’s role to move people based on complaints. Mentioned to Mrs Daniels in interview re rebate on 5 July 2006 – confirms intoxicated.
xii) 07/09/2006 - Interview between Housing Manager and Mr Pearson – complaint re injury to dog. Mr Pearson stated that children had climbed fence and damaged clothesline.
xiii) 20/09/2006 – meeting between Jeanette Kosalka (ACT Housing), Mr and Mrs Pearson, Pierina Ariloa and Carol Shaw (tenants of Bellbird Gardens Complex):
(1)complaint re: death of dog - admitted by Mrs Daniels;
(2)Mrs Pearson provided medical evidence of her significant emotional stress.
(3)Mr and Mrs Pearson foreshadow claim against ACT Housing;
(4)Mr and Mrs Pearson state that the occupants of no 8 have threatened to ‘get them’ they are in fear for their safety and wish to be moved from the premises.
(5)Many tenants of complex wished to be transferred away from the problems created by the occupants of no 8.
(6)All complain of noise, threats, abuse and foul language. All state that their life has been significantly adversely affected by the conduct of the occupants at no 8. All express fear of retribution.
(7)Ms Kosalka responds:
(a) It was their prerogative to apply for transfer;
(b) If they were not prepared to release their complaints to the Residential Tenancies Tribunal or give evidence before the Residential Tenancies Tribunal then the chance of securing an eviction were slim.
(c) These matters take time to work out;
(d) The Residential Tenancies Tribunal did not always give the outcome desired.
xiv) Undated anonymous complaint – details foul language, abuse from tenant and children at no 8 and no 15; children running of roof; children breaking mail boxes, scattering rubbish and lighting fires. This complainant states that her health has deteriorated, she is threatened by males residents at no 8 and no 15 and is so afraid to go out that she is a prisoner in her own home. She asks not to be identified for fear of vicious reprisals.
xv) 26/09/2006 – letter sent to tenant, noting several complaints had been received and setting up a meeting to discuss the complaints for 5/10/2005. Ms Daniels failed to attend this meeting.
xvi) 05/10/2006 – series of complaints put to Mrs Daniels – the record of interview conveys the impression that Mrs Daniels did not take her obligations under clause 70 of the Residential Tenancy Agreement seriously and that her defence was generally that she and her family were being picked upon. It is noted that Mrs Daniels applied for a transfer to other property on 05/09/2006.
xvii) 20/10/2006 – phone call from Mr Pearson outlining incident referred to in paragraph 9(a)(iv) above, and noting that although Mrs Daniels was arrested, when she returned the next day she came onto their property and threatened to kill Mrs Pearson.
xviii) 23/11/2006 – Mrs Daniels children gave been taken into care; she blames Mrs Pearson for this. Ms Kosalka made a note of a phone conversation with Mrs Daniels. In this conversation Ms Kosalka advised that the neighbours ‘had a right to live without serious or continuous interference with the quiet enjoyment of their premises. Ms Kosalka further advised Mrs Daniels that a Notice to Vacate would be issued. Ms Kosalka then notes that only one Notice to Remedy had been issued and that a second should be served prior to a Notice to Vacate.
xix) 23/11/2006 – Mrs Pearson advise ACT Housing that she had moved out of her home for the time being because she could no longer live with the threat to her safety.
xx) On or about November 2006 Mr and Mrs Pearson wrote to ACT Housing restating many of the complaints detailed above and asking for help. They stressed the toll on their health and wellbeing and their fears relating to injury from assault or accidental fire.
xxi) 24/11/2006 – ACT Housing served a Notice to Remedy on Mrs Daniels. This notice was in quite specific terms and pointed out that Housing Act has received further complaints indicating that you have behaved in an abusive and aggressive manner, that you your residents and guests create excessive noise and anti-social behaviour and that you and your residents and guests interfere with the quiet enjoyment of the other tenants in the complex.
(a) The notice stated that the tenant had 14 days to remedy the breach of clause 70. A failure to remedy would result in either a Notice to Vacate or an application to the Residential Tenancies Tribunal under section 51(d) of the Act.
xxii) 11/12/2006 – complaint by Mr Pearson – Ms Daniels yelling ‘up and down the street’; the police called twice in two weeks.
xxiii) 11 & 12/12/2006 further complaints form other tenants at complex that Mr Kennedy was using foul language and threatening people with a knife. Three people arrested – the tenant, Mr Kennedy and a guest at the premises.
xxiv) 19/12/2006 anonymous complaint from another tenant in the complex in regard to:
(a) daily arguments at no 8;
(b) regular knocking on peoples’ doors asking for money;
(c) police being called twice in recent days to deal with loud arguments at no 8.
xxv) 08/01/2007 - complaint by Mr Pearson – police attending domestic violence at no 8. Concern that no action was being taken by ACT Housing.
xxvi) 23/01/2007 ACT Housing served a Notice to Vacate on Mrs Daniels this required her to vacate the premises by 8 February 2007.
xxvii) 02/02/2007 - complaint by Mr Pearson – further disturbance at no 8, police called, fence damaged.
12) The Respondent made no application to the Residential Tenancies Tribunal for a termination and possession order. The Residential Tenancies Tribunal understands that Mrs Daniel has been transferred to another ACT Housing property.
RELEVANT LAW
Standard Residential Tenancy Terms
Clause 52
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.
Clause 70:
The tenant must not:
…
(b) cause or permit nuisance; or
(c) interfere, or permit interference with, the quiet enjoyment of the occupiers of nearby premises.
Clause 73
The tenant is personally responsible for the actions or omissions of visitors, guests or other people on the premises if:
(a) the action or omission would if performed by the tenant have constituted a breach of this tenancy agreement; and
(b) the person is on the premises with the permission of the tenant.
Clause 93
The tribunal may order the termination of the tenancy and eviction of the tenant on the ground of breach in the following circumstances:
(a) the lessor must serve a written notice requiring the tenant within 2 weeks after the day of service to remedy the breach if it is capable of remedy;
(b) if the breach is not remedied within 2 weeks after the day of service or if the breach is not capable of remedy – the lessor must give a notice to vacate the premises within 2 weeks after the date of service of the notice to vacate;
(c) if the tenant does not vacate the premises within the period of 2 weeks after the date of service pf a notice to vacate – the lessor may apply to the tribunal for an order terminating the tenancy and for the eviction of the tenant;
Residential Tenancies Act 1997
Section 6A: What is a residential tenancy agreement?
(1) An agreement is a residential tenancy agreement if, under the agreement –
(a) a person gives someone else ( the tenant) a right to occupy stated premises; and
(b) the premises are for the tenant to use as a home (whether or not together with other people); and
(c) the right is given for value.
Section 48: Certain breaches of standard residential tenancy terms
(1) On application by a lessor, the tribunal may make a termination and possession order if satisfied that –
(a) the tenant has breached the standard residential tenancy terms…; and
(b) the lessor has served a termination notice on the tenant based on that breach; and
(c) the tenant did not vacate in accordance with the notice; and
(d) the breach of the standard residential tenancy terms was not in accordance with a term of the resident tenancy agreement endorsed by the tribunal and
(e) the breach justifies the termination of the tenancy.
Section 51: Damage, injury or intention to damage or injure
On application by a lessor, the tribunal may make a termination and possession order effective immediately if satisfied that the tenant has intentionally or recklessly caused or allowed, or is likely to cause or allow –
(a) serious damage to the premises or to other property of the lessor;
(d) serious or continuous interference with the quiet enjoyment of nearby premises by an occupier of the premises.
Dictionary
Premises includes –
(a) any habitable structure, whether it is affixed to the land or not; and
(b) part of any premises; and
(c) any land, buildings or structures belonging to the premises.
The concept of quiet enjoyment
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 Residential Tenancies Act 1997 provides that under a residential tenancy agreement the premises are for the tenant to use as a home. (S6A). This would encompass the notion of reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises (Clause 52), 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 without being abused, threatened or made to feel unsafe.
At common law all leases were said to contain an implied covenant by the lessor not to derogate from the grant, and, an express covenant for quiet enjoyment. Project Blue Moon Pty Limited v Fairway Trading Pty Limited, ACTTT 139 of 1998 and 243 of 1998 (16 April 1999); Aussie Traveller P/L v Marklea P/L, [1997] QCA 2(11 February 1997). These covenants do no more than restate the general rule of all contracts that a promisor may not do any act, which destroys the efficacy of the bargain. Hawkesbury Nominees P/L v Battik P/L, [2000] FCA 185 (1 March 2000).
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.[1]
[1] Allan Anforth, Tom Thawley and Peter Christensen, Residential Tenancies Law and Practice in New South Wales, 2003 Edition, Australian Legal & Professional Books, at p 65 to 68.
The quiet enjoyment of premises is interfered with if the lessee’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. Ingram v Department of Housing (Tenancy) [2002] NSWCTT 84 (8 May 2002). Interference may be by act or omission. Interference with quiet enjoyment is a question of fact.
A wide range of conduct has been found to amount to interference with quiet enjoyment: failure to carry out repairs Mullins v Pace (1998) NSWRT 251; carrying out of repairs Worrall v Commissioner for Housing in the ACT [2002] FCA 127; violent and abusive behaviour Sampson v Floyd [1989] 33 EG 41; noise alone Hawkesbury Nominees P/L v Battik P/L, [2000] FCA 185 (1 March 2000) and failure by the lessor to take steps to prevent others from causing interference with quiet enjoyment Aussie Traveller P/L v Marklea P/L, [1997] QCA 2(11 February 1997).
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, or 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. Ingram v Department of Housing (Tenancy) [2002] NSWCTT 84 (8 May 2002) at page 28. 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 Residential Tenancies Act 1997 includes land and part of any premises. If fear of abuse, violence or assault prevents a householder from entering a garden or opening curtains, this is a direct and fundamental interference with the usual use of premises and thus an interference with quiet enjoyment. Where a tenant’s daily activities are interfered with by noise or abuse emanating from adjoining premises, this is also interference with quiet enjoyment.
The meaning of ‘permit’ in clause 52
This matter raises the question of whether a lessor can be held liable for a breach of the residential tenancy agreement with tenant A, where the lessor fails to take action to prevent an interference with tenant A’s quiet enjoyment of their premises, where that interference arises from the conduct of Tenant B. Does this failure to take action amount to ‘causing or permitting’ interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises?
Aussie Traveller P/L v Marcela P/L, [1997] QCA 2(11 February 1997), set out the law in relation to commercial leases. The lessor owned adjacent premises, each of which was leased to different tenants. The activities of one tenant caused interference with the quiet use and enjoyment by the second tenant of the premises leased to the second tenant. McPherson, JA, in dealing with the issue of the lessor’s liability asked whether the lessor could be held liable for the interference or disturbance caused by the conduct of another of his tenants? The older authorities suggest that in those circumstances the lessor is not liable for breach unless the acts in question were authorised by the lessor, or at least were reasonably foreseeable. … In Malzy v Eicholz [1916 2 KB 308, the landlord was acquitted of liability because it was not foreseeable that the other tenant would engage in an activity that not only constituted a nuisance but was also illegal. On the other hand, the landlord in Haig v Real Estate Debenture Corporation Ltd [1940] 1 All ER 13 was held liable for disturbance that was the reasonably foreseeable consequence f the reasonably foreseeable actions of another tenant.
Some of the older decisions insist on proof of “authorisation” or “active participation” by the landlord in the act giving rise to the consequence complained of. The law, however, has moved some way since those decisions were given. A person may now be liable for acts done on his land creating a nuisance, even though they were done by the trespasser or resulted form natural causes, if he fails to take steps to eliminate them. … The result is that although, apart from any provision in the lease, a lessor generally loses control over premises once they are let to a tenant, he may nevertheless remain legally responsible for tortious acts done on the land by a tenant at least if at the time he agreed to part with possession and control, it was reasonable foreseeable that the tenant was likely to those acts. ([1997] QCA 2(11 February 1997) at pages 6 to 7)
…
The more recent cases dwell not so much on whether the landlord has approved the conduct of the tenant as whether he is in a position to correct or terminate it. Where, through the lease provisions or otherwise, he has that ability, the thought is that he would not be able to escape his obligation under a covenant of quiet enjoyment by steadfastly refusing to exercise his authority. [1997] QCA 2(11 February 1997) at page 8.
In Aussie Traveller P/L v Marklea P/L the lessor was held liable for the disturbance or interference with the quiet enjoyment of his tenant’s use of premises, because, although he had not authorised the conduct, he had failed to use his ability to correct or terminate the conduct of another of his tenants. By clause 7 of the lease the lessee undertook not to do or permit any act or thing, which might cause damage or disturbance to any other tenant or to the lessor. The lessor would have been able, by enforcing that provision of the lease to control the interference caused by the actions of his tenant.
In a matter concerning a residential tenancy agreement the principle of Aussie Traveller P/L v Marklea P/L has been applied. Ingram v Department of Housing (Tenancy) [2002] NSWCTT 84 (8 May 2002) dealt with a dispute where the facts were similar to this matter. The relevant provisions of the Residential Tenancies Act 1987(NSW) are set out below:
Section 22
Tenant’s right to quiet enjoyment
(1) It is a term of every residential tenancy agreement that:
(a) the tenant shall have quiet enjoyment of the residential premises without interruption by the landlord or any person claiming though, by or under the landlord or having superior title (for example, a head landlord) to that of the landlord, and
(b) the landlord or the landlord’s agent shall not interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of the tenant in using the residential premises.
Section 23
Use of premises by tenant
(1) It is a term of every residential tenancy agreement that:
(b) the tenant shall not cause or permit a nuisance, and
(c) the tenant shall not interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of any neighbour of the tenant.
After finding that the conduct of one tenant, which included, assault, swearing, abuse and excessive noise constituted an interference with the reasonable peace, comfort or privacy of their neighbour, also a tenant of the lessor, the Tribunal addressed the liability of the lessor. This involved a consideration of the meaning of ‘permit’ in section 22 above. The Tribunal adopted the reasoning of the Federal Court in Elliott v Nanda & the Commonwealth [2001] FCA 418 (11 April 2001), where the concept of ‘permit’ meaning to intentionally allow was rejected and the view of Isaacs J in Adelaide City Corporation v Australian Performing Rights Association Ltd (1928) 40 CLR 281 (at490-491) was adopted: The word ‘permits’ is of very extensive connotation… the primary [dictionary] meaning of ‘permit’ is to allow, suffer, give leave; not to prevent.
Thus it was held that a lessor ‘permits a breach’ if the landlord fails to take reasonable steps to reduce or eliminate breaches of a tenancy of which the lessor is aware, or ought to be aware. The lessor must be given a reasonable time after becoming aware of the interference in which to remedy before becoming liable. This principle follows the view of the Court in Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313.
Is Mrs Daniels in breach of the Residential Tenancy Agreement between herself and the Respondent?
The Respondent does not dispute the facts of the conduct of Mrs Daniels, Mr Kennedy, the children resident in the premises or the visitors to 8/5 Tennison-Woods Circuit, Bonython ACT. The noise, abuse, foul language, threats and other anti-social conduct described in the evidence before the tribunal constitute an interference with the quiet enjoyment of the premises at 7/5 Tennison-Woods Circuit, Bonython ACT. Clause 73 applies to fix Mrs Daniels with responsibility for the conduct of other residents and visitors to her premises. Mrs Daniels is therefore in breach of her obligations that arise under Clause 70 of the Residential Tenancy Agreement, in that she has caused or permitted nuisance and has interfered with the quiet enjoyment of the occupiers of nearby premises. That is, the Tribunal finds as a matter of fact, that the quiet enjoyment of their premises by the Pearson’s has been interfered with.
Is the Respondent in breach of the Residential Tenancy Agreement between the parties?
The Respondent submits that the obligation arising from clause 52 of the Residential Tenancy Agreement has been met. Mr Jarvis submits that the landlord has complied with all obligations to allow quiet enjoyment by taking steps of notices to remedy (21 January 2006, 24 November 2006) and a notice to quit (25 January 2007) on the offending tenant, and by taking other informal action to follow up complaints by the applicant about the behaviour of the offending tenant and her children.
There appears to be some confusion by the lessor as to whether the first notice to remedy was served in 2005 or 2006. The statement of Ms Kosalka contains at Annexure A, a copy of a Notice to Remedy dated 21 January 2005 and at Annexure D a copy of a Notice to Remedy dated 26 November 2006. This states that On 21 January 2006 you were issued with a notice to remedy. This error appears to have been picked up by several other officers of the lessor and by Mr Jarvis in his submission
A lessor ‘permits a breach’ if the landlord fails to take reasonable steps to reduce or eliminate breaches of a tenancy of which the lessor is aware, or ought to be aware. The lessor must be given a reasonable time after becoming aware of the interference in which to remedy before becoming liable. Thus a lessor would discharge the obligation arising from Clause 52 not to permit any interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises, if the lessor took reasonable steps to prevent, eliminate or reduce the conduct that gave rise to the interference.
Under the Residential Tenancies Act 1997, and the Residential Tenancy Agreement between the lessor and Mrs Daniels such reasonable steps would include the serving of notices to remedy. If upon the receipts of the notice to remedy the offending tenant had remedied the breach by ceasing the offending conduct and causing her children and visitors to cease their offending conduct, then the duty of the lessor would be fulfilled.
An examination of the evidence before the Tribunal reveals that the lessor had actual knowledge of the interference with the reasonable peace, comfort or privacy of Mr and Mrs Pearson in the use of the premises at 7/5 Tennison-Woods Circuit, Bonython ACT from at least November 2004. The lessor served the first notice to remedy on 21 January 2005. This is action in compliance with the obligation to take reasonable steps to eliminate the interference. If the tenant has responded to the notice by remedying her conduct, the lessor’s obligation would be met.
i) However, there is no positive evidence before the Residential Tenancies Tribunal that the tenant did remedy the breach within 14 days or at all. There is no record of formal or informal complaints from January 2005 until May of 2005. The lessor received numerous complaints from May 2005. These included formal complaints by the Applicants, formal complaints from other identified tenants of the complex and anonymous complaints. The lessor had other knowledge of the interference being suffered by the Applicants: the subpoenaed documents reveal that the lessor had copies of the police reports, and knew that Mrs Pearson had moved out of the premises following the incidents on 19 November 2006, when police were called to 8/5 Tennison-Woods Circuit, Bonython ACT, on three occasions. The substance of the incidents was that Mrs Daniels had threatened to kill Mrs Pearson and her dogs. After the third incident Mrs Daniels was arrested for a Brach of the Peace. The AFP reported, inter alia:
(i)Ms Daniels…was identified as heavily intoxicated and extremely verbally abusive towards her neighbours from unit 7. On the second incident Ms Daniels attended the front door of unit 7 with a baseball bat in her hand. Ms Daniels then continually banged the bat on the door, while verbally abusing the residents inside.
A second notice to remedy was served on 24 November 2006. There is no evidence before the Residential Tenancies Tribunal that the tenant did remedy the breach within 14 days or at all.
The subpoenaed documents indicate that the lessor knew that the problem continued throughout the tenancy:
- An internal email from Keith Ward dated 13 December 2006 notes that since June 2006 there have been 9 complaints relating to Mrs Daniels. ‘The matters generally relate to verbal threats, drunken behaviour, noise/nuisance and the children generally misbehaving’.
- An internal minute to the Executive Director Housing and Community Services, date 23 January 2007 notes that the tenant did not remedy the breach after either of the notices to remedy.
The lessor did undertaken a number of informal steps, such as interviewing the tenant and pointing out her obligations under the tenancy agreement, sending warning letters and attempting to support the tenant with regard to the difficulties created by her own alcohol use, the domestic violence that was occurring and the overcrowding caused by having up to 9 children and two adults living in a flat that was too small. The lessor formed the opinion that transferring Mrs Daniels to other accommodation would best solve the problems being experience at the complex.
After the Pearsons made application to the Residential Tenancies Tribunal for compensation, the lessor served a Notice to Vacate upon Mrs Daniels. This notice, dated 23 January 2007, required the tenant to vacate the premises on or before 8 February 2007. The tenant appealed though the lessor’s internal procedures and the eviction process was not proceeded with. The Residential Tenancies Tribunal understands that at the date of writing this decision, the lessor has transferred Mrs Daniels to another ACT Housing property.
The issues raised in this matter have been considered b y the NSW Supreme Court, on appeal from the NSW Consumer, Trader and Tenancy Tribunal in Department of Housing v Consumer, Trader and Tenancy Tribunal & Ingram (2003) NSWSC 150. In rejecting the Department’s argument that ‘permit’ carried a connotation of control or active permission, Shaw J noted the Macquarie dictionary definition of permit as meaning, to allow…to do something; let (something) be done or occur; to tolerate; to agree to and stated:
The applicant sought to apply a maxim of statutory interpretation, noscitur a sociis, to the phrase “shall not interfere, or cause or permit any interference. The applicant submits that the word ‘permits’ takes on a content, in this statutory provision, similar to that of the word ‘cause’. In this sense, the applicant submits, the word ‘permits’ means some kind of volitional activity and further, mere indifference or an omission, such as failing to take action against neighbouring tenants, cannot amount to permission by the Department.
…
On the ordinary meaning of the work ‘permit’, to allow or tolerate a breach of statutory rights seem to property ground an action to enforce those rights. It has been held that the concept pf permission may, in some contexts, include the absence of appropriate steps to influence or control conduct. (see Ellior v Nanda (2001) 111 FCR 240) paragraphs 25 to 29)
His Honour went on to find that where the Department having actual knowledge of the breached by the neighbouring tenant, and knowing that failure by the Department to act to curtail the offending conduct would result in further breached, the Department had permitted the breach and thus the interference with the quiet enjoyment. Taking no active step to remedy the situation after taking cognisance of the likelihood of further breaches is,…sufficient for it to have been open to the Tribunal to find that liability for the breaches could attach to the Department. (paragraph 33)
The lessor had within its powers the means to bring about the cessation of the interference with the reasonable peace, comfort or privacy of the Pearsons by either transferring the offending tenant to other premises or availing itself of the procedures set down under the Residential Tenancies Act 1997. These procedures are set out in the standard residential tenancy terms at Clause 93 and Sections 48 and 52 of the Act. The lessor did commence the lawful procedures available under the Act, which more likely than not would have resulted in eviction of Mrs Daniels if completed. However, the lessor took no action to follow up: it has not at any stage applied to the Residential Tenancies Tribunal for a termination and possession order as put forward in the notices to remedy. The lessor has permitted the interference with the quiet enjoyment to which the Pearson’s were entitled, by tolerating or failing to act reasonable to prevent or curtail the continuing breach by Ms Daniels and others.
The lessor has finally achieved a cessation of the interference by removing the offending tenant by means of transfer. While the Residential Tenancies Tribunal appreciates that the lessor, as a provider of low cost housing and a landlord of last resort, was placed in a difficult position with regards to Mrs Daniels and her children’s needs, this in no way excuses a breach of its obligations arising under the Residential Tenancy Agreement between the lessor and the Pearsons. The lessor has failed to take all lawful steps to bring about a correct or terminate the interference with the reasonable peace, comfort or privacy of the Applicants. Those steps, which were taken, were not taken within a reasonable time of becoming aware of the breach. Therefore the lessor is in breach of the residential tenancy agreement.
Compensation
The promise made by a lessor of residential property to their lessee may be paraphrased as – these premises are leased to you for use as a home, the lessor promises to take all necessary steps to ensure that the lessee is able to have full use of the home. A promise of this type is fundamental to a primary purpose of the Residential Tenancy Agreement - to provide a home for the tenant. While at common law the covenant for quiet enjoyment might be express, or implies as a matter of fact to give efficacy to the contract, in the statutory tenancy created by the Residential Tenancies Act 1997, and contained in the standard residential tenancy terms the promises are express at clause 52 and clause 70.
Section 104(d) of the Residential Tenancies Act 1997 provides that the Residential Tenancies Tribunal may make an order for compensation for loss caused by the breach of the Residential Tenancy Agreement. The applicants claim specific damages of $1358.90, being the veterinary costs incurred in the treatment of their dog Bindi, following the deliberate injury caused to the dogs by Geoffrey Daniels. They also ask for compensation for breach of the ACT Housing’s obligation as lessor to ensure quiet enjoyment of their premises: no specific amount or basis for compensation was put forward.
A party who suffers damage as a result of a breach of contract by another party is entitle to an amount of damages which will, as far as possible, put the injured party in the same position they would have been in had the breach not occurred. That is that damages for breach of contract are compensation loss. Robinson v Harman(1848) 1 Exch 850. The innocent party must establish that the loss complained of was caused by the breach of contract and that the loss was not too remote from the breach. The rule in Hadley v Baxendale (1854) 9 Exch 341 is applied to determine which loss is recoverable. An innocent party may recover damages caused by a breach of contract if they are the types of loss that occurs in the usual course of events, or arise naturally from the breach, or where the loss complained of may be reasonably supposed to have been in the contemplation of the parties at the time they made the contract to be likely to result from the breach.
While damages for personal distress or pain and suffering are not usually awarded for a breach of contract, recent decisions indicate that such an award is appropriate and proper where the contract itself promised peace, comfort, enjoyment or relaxation. Damages have been awarded for breach of contracts relating to holidays and weddings. Jarvis v Swan Tours [1973] 1All ER 71; Baltic Shipping v Dillon (1993) 111 ALR 289.
The application of the rule in Hadley v Baxendale to the Applicants’ claim for the cost of the veterinary treatment of their dog means that while the conduct of the offending tenant caused their loss, it is too remote from the breach by the lessor. The other loss suffered by the Applicants is difficult to quantify but is caused by the breach by the lessor in failing to abate the interference with their reasonable peace, comfort and privacy. The express terms of the agreement between the parties, when read with s104 (d) of the Act indicate that where the peace, comfort and privacy of a tenant in interfered with, the breaching party is liable for compensation.
The interference complained of
There can be no doubt that the Pearson’s suffered a significant interference with their peace, comfort and privacy. They did not get what they bargained for - the full use of the premises. They have given evidence that their general health and well-being has suffered and that they have been under considerable stress and suffered a great deal of distress as a result of the lessor’s breach. The evidence of this has not been denied or contradicted by the lessor. The interference includes, but is not limited to:
Noise – loud arguments from next door, children running wild
Offensive language
Interference with privacy – begging for money, running over the roof of the premises, invading yards
Threats and physical violence
General interference with peace and comfort – many incidents requiring police intervention, being afraid to use the outdoor part of the premises
Mrs Pearson left her home.
As a result of the breach, the Applicants have suffered the loss of a large part of the amenity, quiet enjoyment, privacy, peace and comfort promised by the agreement. They have not felt safe in the use of the premises all parts of the premises and their daily lives have been significantly interfered with. Taking into account the length of time involved, the knowledge in the lessor of the breach, the continuing nature of the breach and the manifestly inadequate response of the lessor and guided by the decision in Ingram v Department of Housing (Tenancy) [2002] NSWCTT 84 (8 May 2002), noting other decisions of this Tribunal and taking into account the Table of Comparative Judgement in Allan Anforth, Tom Thawley and Peter Christensen, Residential Tenancies Law and Practice in New South Wales, 2003 Edition, Australian Legal & Professional Books, at p 45 to 50, the Residential Tenancies Tribunal orders the Respondent to pay the Applicants an amount of $6,500.00 for personal distress, or pain and suffering, and $10,000 for direct interference with the reasonable, peace, comfort and privacy of the Applicants.
ORDER
The Respondent is to pay an amount of $16 500.00 to the Applicants within 7 days of the date of this Order.
JANN LENNARD
MEMBER
19 NOVEMBER 2007
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