Faulder v Tran
[2018] ACAT 80
•21 August 2018
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
FAULDER v TRAN (Appeal) [2018] ACAT 80
AA 6/2018
Catchwords: APPEAL – RESIDENTIAL TENANCIES – terminated lease – former tenant sought compensation – alleged failure by lessor to maintain subject premises in reasonable state of repair – alleged delay in making repairs as required – whether specific work to be done related to state of repair of premises at commencement of tenancy or maintenance of premises during tenancy – operation of standard residential tenancy terms 54, 55. 57 and 59 – appropriate amounts of compensation – whether tenant should be awarded filing fees for original proceeding and appeal
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 7, 48, 82
Limitation Act 1985 s 11
Residential Tenancies Act 1997 ss 8, 9, 10, 38, 71, 83 standard terms 3, 21-23A, 52, 54, 55, 57, 59
Cases cited: Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184
Australian Postal Corporation v Hughes [2009] FCA 1057
Bangura & Fan [2013] ACAT 38
Brogan Prestige Properties v Strand & Black [2010] ACAT 60But v Baldwin [2016] ACAT 9
Byrnes v Jokona Pty Ltd [2002] FCA 41Constanzo Laria v Watson [2010] ACAT 79
Faulder v Tran [2018] ACAT 2Irena Peters v Commissioner for Housing in the ACT [2006] ACTRTT 6
Lee v Guo [2017] ACAT 60
Manour v Dangar [2017] ACAT 49
May v Medanic [2011] NSWCTTT 17
Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30
Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313
O’Brien v Dunsdon (1965-66) 39 ALJR 78
Saleem & Gizgeez v Abeygunaskara & Jeevanthan [2011] ACAT 9
Watson v Gaudion [2009] ACAT 15
Wolfe v Albekka [2011] ACAT 22
Worrall v Commissioner for Housing for the Australian Capital Territory [2002] FCAFC 127
Textbook cited: A Anforth, P Christensen, C Adkins, Residential Tenancies Law and Practice New South Wales (7th ed, The Federation Press, 2017)
Tribunal: President G Neate AM
Senior Member A AnforthDate of Orders: 21 August 2018
Date of Reasons for Decision: 21 August 2018
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AA 6/2018
BETWEEN:
CHARLIE FAULDER
Applicant
AND:
VINCENT TRAN
Respondent
TRIBUNAL: President G Neate AM
Senior Member A Anforth
DATE:21 August 2018
ORDER
The Tribunal orders that:
1.The appeal be allowed in part.
2.The orders of the Tribunal dated 9 January 2018 be set aside.
3.Within 28 days from the date of this order, the Respondent pay the Appellant $1,692.50 comprised of:
(a) cleaning $175.00 (b) broken blind $61.50 (c) alarm system $168.00 (d) security key $70.00 (e) ducted vacuum system $40.00 (f) heating system $368.00 (g) general inconvenience $200.00 (h) original filing fee $72.00 (i) appeal filing fee $538.00 ………………………………..
President G Neate AM
For and on behalf of the Tribunal
REASONS FOR DECISION
Introduction
1.On 9 January 2018, a presidential member of the ACT Civil and Administrative Tribunal (the Original Tribunal) ordered Vincent Tran (the Respondent), the lessor of a residential property in Palmerston, ACT (the subject premises), to pay Charlie Faulder, the former lessee of the subject premises, the sum of $154.50, being the total amount awarded for five separate items of a larger claim for compensation.[1]
[1] Faulder v Tran [2018] ACAT 2
2.Charlie Faulder (the Appellant) has appealed against that decision.
Background
3.The circumstances in which the tenancy commenced provide the context for the Appellant’s claim. In summary, the Appellant was given notice to vacate the previously leased property because the owner wanted to move into that property. The Appellant, who had three cats, needed to find alternative rental accommodation fairly quickly. The Respondent’s agents, having been engaged recently as agents for the subject premises, moved quickly to offer the premises to the Appellant for inspection before it came onto the market.
4.Before inspecting the property, the Appellant asked by email whether it would be possible to move in on Monday 29 August 2016 or thereabouts. At that time, some painting work on the subject premises was necessary and tradespersons entered the property to do that work. The work was done quickly to enable the Appellant to occupy the premises. As a consequence of that work, dust was left at the premises.
5.The Appellant leased the premises for one year on Wednesday 31 August 2016, and moved into the premises on that date, before the Respondent or their agents had removed the residue from the tradespersons’ work. The Appellant proceeded to clean the premises before installing furniture and other personal effects. In an email to the Respondent’s agents dated 2 September 2016, the Appellant listed “issues that I would like addressed” including the code and instruction manual for the alarm, keys for front and rear security screen doors, and repair or replacement of the blind to the rear sliding door.
6.The Appellant received the Entry Condition Report on the Thursday, 1 September 2016, and returned the annotated report on 14 September 2016, having recorded in detail her observations about the state of cleanliness and repair of the premises. At the end of the Entry Condition Report, the Appellant referred to the property being dirty, and issues with no alarm code or instruction, not all keys being provided, and a broken blind creating privacy issues. Those matters were collectively described as “All issues that should have been addressed prior to the tenancy commencing. Still not addressed at time of signing this report”, that is, 14 September 2016.
7.On 26 April 2017, the Appellant served a notice to remedy on the Respondent alleging that he had failed to maintain the premises in a reasonable state of repair regarding the ducted heating, contrary to standard residential tenancy term (Standard Term) 55 of the Schedule to the Residential Tenancies Act 1997 (the RT Act) and had failed to make repairs within the time frame required under Standard Term 57. On 5 June 2017, the Appellant served a notice of intention to vacate the premises on 20 June 2017 on the ground that the Respondent had failed to remedy the alleged breach identified in the notice to remedy. The Respondent accepted the Appellant’s termination of the lease.[2]
[2] See Faulder v Tran [2018] ACAT 2 at [2], [3]
8.On 28 August 2017, after one dispute between the parties was resolved, the Appellant made an application against the Respondent seeking compensation totalling $4,822.50 on specified grounds, and the application filing fee of $150.00. The Respondent disputed his liability in relation to each ground, and the Appellant’s claim proceeded to hearing.[3]
[3] See Faulder v Tran [2018] ACAT 2 at [4]-[7]
9.In the application to appeal the decision of the Original Tribunal, the Appellant sought orders to the effect that:
(a)the Orders made on 9 January 2017 be set aside;
(b)within 28 days of the orders made by the Appeal Tribunal, the Respondent pay the Appellant $4,668.00 (or whatever other amount the Appeal Tribunal deems appropriate) plus $538.00 (the appeal application fee) plus any costs incurred by the Appellant in obtaining the transcript of the original hearing (if required).
Issues on, and conduct of, the appeal
10.The written reasons for decision by the Original Tribunal considered each of the items claimed by the Appellant under the headings of cleaning, dining room blind, alarm, keys, ducted vacuum system, birds entering premises, heating/ducting, and general inconvenience/interference with quiet enjoyment. The Original Tribunal:
(a)found in favour of the Appellant in relation to the dining room blind, the security alarm, keys, and ducted vacuum system, but awarded less than the amounts claimed as compensation;
(b)rejected the Appellant’s claims in relation to the other items (that is, cleaning, birds entering the subject premises, heating/ducting, and general inconvenience/interference with quiet enjoyment).
11.In appealing against the award of $154.50, the Appellant contended that the overall award was $4.50 (i.e., $154.50 less the $150.00 filing fee), and that the appeal should proceed because it deals with issues that are relevant to other tenancies.
12.In accordance with directions of a Presidential Member dated 19 February 2018:
(a)the parties gave each other and the Appeal Tribunal documents of specified types; and
(b)the hearing of the appeal was conducted as a review of the original decision,[4] subject to any further order of the Appeal Tribunal.
[4] ACT Civil and Administrative Tribunal Act 2008 section 82(b)
13.The only significant additional evidence admitted at the hearing of the appeal was a video recording of the subject premises made by the Appellant on 31 August 2016, when the Appellant proceeded through the subject premises observing the state of cleanliness and repair of each room.
14.The parties adopted different approaches in their respective written and oral submissions on the appeal. The Appellant’s reasons for appeal listed 21 questions (or sets of questions) of law or fact to which answers were sought from the Appeal Tribunal. The Appellant made specific submissions on each of the legal and evidentiary issues identified in the appeal.
15.The Respondent’s representatives took a broader approach, focusing on the facts of the case and what is the usual practice of a lessor, a lessor’s agent and tradespersons when dealing with repair and maintenance issues as they arise or are identified.
16.The way in which the appeal was argued directs attention to the interpretation of sections of the RT Act and some of the Standard Terms.
17.In considering the appeal it is appropriate to proceed by reference first to the general questions raised by the Appellant and then to the topics considered by the Original Tribunal in the sequence set out in the Original Tribunal’s reasons for decision.
General issues
18.The Appellant asked:
(a)Whether the Original Tribunal was correct in determining that breaches of Standard Term 54(1) are subject to Standard Terms 57 or 59?
(b)Whether the Original Tribunal was correct to not award compensation from the start of the tenancy where there had been a breach of Standard Term 54(1)?
(c)Whether it was reasonable for the Original Tribunal to rely on evidence/statements that were not put to the Appellant during the hearing or where the Appellant had no opportunity to test the evidence?
19.The first two questions involve the interpretation and application of some Standard Terms. The third question involves what might be described as procedural fairness issues.
Standard Terms 54, 55, 57 and 59
20.The tenancy agreement between the Respondent and the Appellant provided that the Standard Terms applied to the agreement. The Appellant made submissions in relation to the operation of Standard Terms 54, 55, 57 and 59, contending that some of the conclusions reached by the Original Tribunal were inconsistent with a proper understanding of their interaction and hence should be varied. Those submissions gave rise to two issues for this Appeal Tribunal namely:
(a)whether the interpretation contended for by the Appellant is correct; and
(b)if it is correct, to what extent it is relevant to some of the specific determinations made by the Original Tribunal.
21.It is appropriate to deal with the former issue at the outset and then consider any implications of it in relation to the specific determinations under appeal.
22.The relevant Standard Terms provide as follows:
Lessor to make repairs
Lessor to provide premises in a reasonable state at the start of the tenancy
54 (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.
(2)An exclusion must be in writing and may, but need not, be included in the tenancy agreement (if in writing).
…
Lessor to make repairs
55 (1)The lessor must maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the tenancy agreement.
(2)The tenant must notify the lessor of any need for repairs.
(3)This section does not require the tenant to notify the lessor about anything that an ordinary tenant would reasonably be expected to do, for example, changing a light globe or a fuse.
…
57Subject to clause 55, the lessor must make repairs, other than urgent repairs, within 4 weeks of being notified of the need for the repairs (unless otherwise agreed).
…
Urgent repairs
59The tenant must notify the lessor (or the lessor’s nominee) of the need for urgent repairs as soon as practicable, and the lessor must, subject to clause 82, carry out those repairs as soon as necessary, having regard to the nature of the problem.
23.Standard Term 54 deals with the lessor’s duty when handing over the premises at the start of the tenancy. There are a number of things to note about Standard Term 54:[5]
[5] See A Anforth, P Christensen, C Adkins, Residential Tenancies Law and Practice New South Wales (7th ed, The Federation Press, 2017) (Anforth et al) at [2.13.11], [2.52.1], [2.63.2], [2.63.5]
(a)It only addresses the lessor’s duty in handing over the premises at the start of the tenancy. Other Standard Terms deal with the duty of repairs for defects that arise during the tenancy.
(b)The Standard Term is couched in mandatory language, that is, the lessor ‘must’ ensure that the premises comply with it.
(c)The Standard Term is couched in outcome language, that is, the lessor must ‘ensure’ that the Term is complied with. It is not enough that the lessor did his or her best or ‘had a go’ at complying with the Term. It is not a defence for a lessor to plead that reasonable steps were taken to rectify defects.[6] There is only one permitted outcome. The lessor must ensure that (a)-(d) are satisfied (unless they are excluded from the tenancy agreement).
(d)The duty does not just apply to the premises as a whole in some global sense. The definition of ‘premises’ in the Dictionary to the RT Act defines premise to include any habitable structure, part of the premises, and any buildings or structures belonging to the premises. Standard Term 54 expressly applies to all furniture, fittings and appliances provided with the premises (unless they are excluded from the tenancy agreement).
(e)Each of the sub-paragraphs stands alone, so that the lessor’s duty applies to each of the listed items separately.
(f)There is a fundamental difference between a premises being ‘reasonably clean’ (54(1)(b)) and in a ‘reasonable state of repair’ (54(1)(c)). They are independent concepts.
(g)Cleanliness is an objective test judged by average standards in the community. It is not the standard preferred by either party. It is not the standard required by a fastidious house proud person, nor is it what will be accepted by the proverbial ‘slob’. It is somewhere in between depending on the circumstances of the premises.
(h)The lessor is required to ensure that the premises and its contents are all in a reasonable state of repair.
(i)The duty on the lessor to provide premises that are ‘reasonably secure’ (54(1)(d)) is a further independent concept. Premises can be reasonably clean and in a reasonable state of repair (in the sense that everything in the premises works as it should) but they might not be reasonable secure. For example, the premises might be leased without locks or no window locks so that it would be easy for a burglar to force entry.
[6] Brogan Prestige Properties v Strand & Black [2010] ACAT 60 at [68] citing Irena Peters v Commissioner for Housing in the ACT [2006] ACTRTT 6
24.Standard Term 3 provides a general prohibition on contracting out of the terms of a tenancy agreement or the terms of the RT Act.
3. A party to this tenancy agreement cannot contract out of it or out of the provisions of the Residential Tenancies Act, except as provided in that Act.
25.Sections 8 to 10 of the RT Act reinforce that provision by stating that a residential tenancy agreement:
(a)must contain, and is taken to contain, terms to the effect of the Standard Terms;
(b)may contain a certain specified types of exceptional clauses (not applicable in this case); and
(c)may contain any other term that is inconsistent with a Standard Term if the term has been endorsed by the Tribunal under section 10.[7]
[7] A term of a residential tenancy agreement is void if it is inconsistent with a Standard Term and has not been endorsed by the Tribunal (sections 9, 10)
26.Standard Term 54(2) permits the parties to contract out of the terms of Standard Term 54 provided that is done in writing. This may permit the parties to agree in writing for a tenant to move into possession before the premises have been cleaned or before they are in a reasonable state of repair or security. The exception is one that potentially permits inroads into basic tenant protections. That might explain why the exception ‘must’ be in writing. The Appellant and Respondent did not contract out of Standard Term 54. Consequently, it applies in this case.[8]
[8] See also Anforth et al at [2.52.3]
27.The Appellant submitted that where there is a breach of Standard Term 54(1), Standard Terms 57 and 59 do not apply. A lessor’s obligation is to provide premises that are fit for habitation, reasonably clean, in a reasonable state of repair and reasonably secure at the commencement of the tenancy. If the lessor does not meet the obligations under Standard Term 54(1), the lessor is in breach. There is no requirement that a lessor will be given four weeks to address those issues before a breach occurs.
28.In support of that the submission, the Appellant pointed to the heading above Standard Term 54 (‘Lessor to provide premises in a reasonable state at the start of the tenancy’) and noted that there is no requirement in Standard Term 54 that the tenant notify the lessor of these issues. There is no clause similar to Standard Terms 57 and 59.
29.By comparison, Standard Terms 55, 56 and 57 come under the heading ‘Lessor to make repairs’. Standard Term 55 provides that a lessor must maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the tenancy[9], and obliges a tenant to notify the lessor of the need for repairs. Subject to Standard Term 55, Standard Term 57 provides that a lessor must make non-urgent repairs within four weeks of being notified of the need for those repairs.
[9] See But v Baldwin [2016] ACAT 9 at [28] –[30] and cases cited
30.The Appellant submitted that, if that is a correct construction of the operation of those Standard Terms, there is no requirement under Standard Term 54 that a tenant notify a lessor of a breach of that Standard Term. Nor should a period of four weeks be allowed for the breach to be remedied. More specifically, any award of compensation for a breach of Standard Term 54(1) should be assessed from the date of the breach, not from four weeks after the date of notification (if any) by the tenant to the lessor. In other words, if the lessor is found to have breached Standard Term 54, compensation should be awarded from the commencement of the tenancy.
31.On that basis, the Appellant submitted that the Original Tribunal was in error when it awarded particular amounts of compensation for the broken blind, the alarm that was not functioning and the delay in providing the key to the screen doors (matters considered in detail later on these reasons the decision). The amounts awarded by the Original Tribunal were calculated as if Standard Term 57 applied, allowing four weeks to undertake non-urgent repairs after notification by a tenant. The Original Tribunal did not order compensation for the first four weeks after the issues were reported. The Appellant submitted that the Original Tribunal was in error in not awarding compensation for that period.
32.The Respondent did not make submissions directly about the legal interpretation point, but submitted that the subject premises were provided in a reasonable state of repair. A broken blind, an alarm that is not operating and lack of screen door key do not amount to the property being provided in an unreasonable state of repair. Therefore, the Respondent submitted, the minor maintenance issues are subject to Standard Terms 57 and 59. Standard Term 54(1) is not relevant. On that point, the Appellant contended that each of the items and fixtures within the subject premises needed to be in a reasonable state of repair. In the Appellant’s submission “It’s not a holistic picture of the property so that some things might be broken, but they’re minor, so that’s okay because generally the property works.”[10]
[10] Transcript of Appeal hearing, page 13
33.Before considering each specific matter for which compensation is claimed, it is necessary to decide about the scope and interaction of Standard Terms 54, 55, 57 and 59.
34.This Appeal Tribunal has concluded that, for the reasons set out above at [27] to [31], Standard Term 54 operates independently of Standard Terms 55, 57 and 59 because the Standard Terms deal with different matters and take effect at different times. The traditional approach taken to Standard Term 55 and its equivalent provisions in other jurisdictions is that the lessor’s duty to maintain premises during a lease depends on the lessor being sent a notice of the need for the repair. That duty is contrasted with the lessor’s duty under Standard Term 54 to provide the premises in a reasonable state of repair at the commencement of the tenancy.[11]
[11] Watson v Gaudion [2009] ACAT 15 at [23]
35.Consequently:[12]
(a)Standard Term 54(1) does not operate subject to Standard Terms 55 and 57;
(b)the obligation to remedy defects to which Standard Term 54 applies, arise at or before the tenancy commences, not if and when a lessor is given notice under Standard Term 55 or 59; and
(c)any compensation payable for a breach of Standard Term 54 is calculated for the period from the commencement of the tenancy until the date when the defect is remedied (for example, by a repair of the broken item).
[12] See [18](a) and (b) above
36.The issue in this case is whether Standard Term 54 applied in relation to any or all of the three matters complained of (the broken blind, the alarm and the screen door key).
Procedural fairness
37.As noted earlier (at [18](c)), the Appellant asked whether it was reasonable for the Original Tribunal to rely on evidence/statements that were not put to the Appellant during the hearing or where the Appellant had no opportunity to test the evidence?
38.The Appellant contended that some of the material on which the Original Tribunal relied was not put to her directly at the hearing, so she did not have an opportunity to reply to it. For example, the Appellant referred to a finding that her loss in relation to the faulty blind should be minimal because she had hung a curtain over a curtain rail. The Appellant acknowledged that she stated clearly in an email to the Respondent’s agent that she was hanging another curtain over the rail. But there was no further discussion of that in the emails, and the Appellant contended that there was no opportunity at the hearing to put to the Original Tribunal whether those actions reduced the impact of the faulty blind.[13] According to the Appellant, had the opportunity been given, she would have told the Original Tribunal that the backing on the curtain was slippery and, for that reason and because of the actions of her cats, the curtain did not remain in place and did not provide privacy or retain heat. It slid off the rail when the Appellant moved it to go out the back door.[14]
[13] Transcript of Appeal hearing, page 23. It is apparent from the Transcript of the Original Tribunal hearing pages 17-21 that this evidence was not given to the Original Tribunal
[14] Transcript of Appeal hearing, page 25
39.The Appellant also referred to the “bigger issue” with the tradespersons. The Appellant provided the Original Tribunal with a chronology (which contained a contemporaneous record of events) and photographs, together with emails and other documents which, the Appellant submitted, challenged some of what the Respondent asserted.[15] According to the Appellant, “the evidence is actually there” but she did not take the Original Tribunal to each of those items and “it was unclear what was then relied on” by the Original Tribunal.[16] The Appellant submitted that, given the opportunity, she would have put that the problem with the duct work was not fixed.[17]
[15] Transcript of Appeal hearing, page 23
[16] Transcript of Appeal hearing, page 24
[17] Transcript of Appeal hearing, pages 25-26
40.The Appellant submitted that, had the Original Tribunal checked the items in the chronology against the annotated invoices provided by the tradespersons, the Original Tribunal would have seen some inconsistency between what the Appellant was stating and what the tradespersons stated.[18] The Appellant further submitted that it is not apparent from the reasons for decision of the Original Tribunal what evidence was relied on, given that the findings of fact do not refer to the contradictory material that was provided.[19] The Appellant conceded that the Original Tribunal might have had regard to the chronology and other materials and decided that the evidence provided by the Respondent was more plausible or reliable.[20]
[18] Transcript of Appeal hearing, page 26
[19] Transcript of Appeal hearing, page 27
[20] Transcript of Appeal hearing, pages 27-28
41.There were two limbs to the Appellant’s submission:
(a)that the Original Tribunal did not give the Appelant sufficient opportunity to respond to material relied on by the Respondent; and
(b)the reasons for decision of the Original Tribunal were inadequate because they did not disclose all the material on which the Original Tribunal relied in making findings of fact and to support the conclusions reached.
42.Given the reliance by both parties on aspects of the hearing before the Original Tribunal, the Appeal Tribunal obtained transcript of that hearing and read it in the course of preparing these reasons for decision. Reference to that transcript will be made in relation to some specific matters which are the subject of this appeal.
43.The transcript also provides a recond of how the hearing before the Original Tribunal was conducted. It is clear from the transcript that the Original Tribunal had before him all the documentary material on which each party relied, and had read at least most of it before the start of the hearing.
44.The proceedings were conducted informally, having regard to the objects of the Tribunal to be as simple, quick, inexpensive and informal as is consistent with achieving justice and observing procedural fairness.[21] The Original Tribunal made it clear from the outset that he would proceed by reference to each topic raised in the appeal and would give each party an opportunity to address him in relation to the material provided in respect of each topic. Neither party expressed any concern about proceeding in that way. The Original Tribunal referred to, or was referred to, relevant documents. Each topic was specifically identified and the hearing proceeded in relation to the issues raised by the Appellant in the following order – cleaning[22], the broken blind[23], the alarm[24], the missing keys to the security screen doors[25], the vacuum cleaning system and birds[26], and general inconvenience. [27] The parties were not taken line by line through each document, but each party had the opportunity to take issue with material provided by the other. Before moving from one topic to the next, the Original Tribunal asked the parties if there was anything else they wanted to raise.[28] In the absence of anything else on one issue, he then considered the evidence and submissions about the next.
[21] ACT Civil and Administrative Tribunal Act 2008 section 7
[22] Transcript of the Original Tribunal hearing, pages 7-17
[23] Transcript of the Original Tribunal hearing, pages 17-21
[24] Transcript of the Original Tribunal hearing, pages 17-21
[25] Transcript of the Original Tribunal hearing, pages 32-37
[26] Transcript of the Original Tribunal hearing, pages 38-68
[27] Transcript of the Original Tribunal hearing, pages 68-78
[28] Transcript of the Original Tribunal hearing, pages, 17, 21, 32, 37 and 68
45.No witnesses were called at the hearing before the Original Tribunal. The Respondent chose to rely on correspondence and invoices as evidence of instructions given to tradespersons and the work done by them, or the reasons why they did not undertake some work as was apparent from their annotations on invoices.[29] The Respondent did not call (and was not obliged to call) tradespersons to give evidence to the Original Tribunal. Consequently, the Appellant did not have an opportunity to ask questions of, or put propositions to, the tradespersons who had attended the subject premises during the tenancy[30] or challenge them about the repair work they had done.[31]
[29] Transcript of Appeal hearing, pages 21-22
[30] Transcript of the Original Tribunal hearing, pages, 52-54
[31] Transcript of Appeal hearing, page 24
46.Any oral evidence at the original hearing came from the Appellant, although not in a conventional form but in the course of questions and answers as the Original Tribunal worked through a list of issues and obtained the views of each party.[32] However, at a point where it might have been appropriate to test some of the evidence given in that way, the Original Tribunal gave the representatives of the Respondent an opportunity to formally ask questions of the Appellant as a witness. Those representatives declined to proceed in that way.[33]
[32] Transcript of Appeal hearing, page 22
[33] Transcript of Original Tribunal hearing, pages 58-61
47.For these reasons, the Appeal Tribunal is satisfied that the Original Tribunal accorded procedural fairness to both parties. In particular, he gave the Appellant sufficient opportunity to put the Appelant’s case and to test the Respondent’s case.
48.To the extent that the Appellant queries whether the Original Tribunal had regard to all relevant evidence, it is appropriate to make some general observations.
49.First, it is apparent from reading the transcript of the hearing before the Original Tribunal that, at the time of the hearing, the Original Tribunal was familiar with the documentary evidence on which the parties relied, and understood the issues before him and the arguments for and against particular outcomes.
50.Second, in giving reasons for decision, neither a court nor a tribunal is obliged to refer to all the evidence or every aspect of submissions before it.[34] It is sufficient that the decision-maker sets out the relevant findings of fact and the evidence on which those findings are made and from which conclusions are reached. The Original Tribunal’s written reasons for decision were comprehensive and dealt with each issue methodically and by reference to evidence and submissions. We are satisfied that the Original Tribunal discharged that obligation to an appropriate standard.
[34] Australian Postal Corporation v Hughes [2009] FCA 1057 at [12] – [19]; Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 at [5]; Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184 at [46]
51.For those reasons, there is nothing before the Appeal Tribunal to suggest that the Original Tribunal failed to have regard to the evidence or the submissions.
52.The fact that the Appellant disagrees with a number of the findings of fact and conclusions reached by the Original Tribunal is no reason to impute a failure by the Original Tribunal to give due consideration and appropriate weight to the evidence.
53.Those general observations do not, however, prevent the Appellant succeeding in relation to some grounds of appeal. As is apparent from the reasons below, the Appeal Tribunal has considered the submissions about whether the Original Tribunal made errors of law and, in light of the conclusions in relation to those submissions, has considered the evidence before the Original Tribunal (as supplemented by some additional evidence) to analyse the conclusions reached and orders made by the Original Tribunal.
Assessing the amount payable to the Appellant
54.Irrespective of what amount is determined by the Appeal Tribunal, it is clear from the way the appeal was conducted and the response of the Respondent that some amount is to be awarded to the Appellant.
55.At the hearing before the Original Tribunal there was some discussion about how the Appellant calculated the amounts claimed for individual matters and the legislative provision or provisions under which the Original Tribunal (and hence the Appeal Tribunal) could make an award.
56.Section 83(d) of the RT Act empowers the Tribunal, in relation to a tenancy dispute, to make an order “requiring the payment of compensation for loss of rent or any other loss caused by the breach of a residential tenancy agreement.”
57.Section 71 provides, in part:
71Reduction of existing rent
(1)On application by a tenant, the ACAT must order a reduction in the rental rate payable under a residential tenancy agreement if it considers that the tenant’s use or enjoyment of the premises has diminished significantly as a result of any of the following:
…
(c)interference with the tenant’s quiet enjoyment of the premises or the tenant’s ability to use the premises in reasonable peace, comfort and privacy by the lessor or anyone claiming through the lessor or having an interest in, or title to, the premises.
(2)To remove any doubt and for subsection (1), a tenant’s quiet enjoyment of premises is interfered with if there is substantial interference with, or a significant lessening of freedom in exercising, the tenant’s rights.
…
58.At least two issues could be considered at this point. The first is whether there is any material difference in the tests to be satisfied under section 71(1)(c) and under section 83(d). The second is which section has to be satisfied in the circumstances of this case.
59.The meaning and scope of those sections was considered helpfully in detail in Lee v Guo.[35] It is not necessary to repeat those matters comprehensively here. For present purposes, it is sufficient to note that, although the wording of the sections is different, they are directed to essentially the same issue.[36]
[35] Lee v Guo [2017] ACAT 60 at [46] – [63]
[36] Lee v Guo [2017] ACAT 60 at [63]
60.One distinction between the sections is that section 71(1) obliges the Tribunal to order a reduction in the rental rate payable in specified circumstances. In cases such as the present where the lease has terminated, there is no rental to be reduced. Previous decisions record the Tribunal’s practice (building on the practice of the former Residential Tenancies Tribunal) that compensation should be awarded by way of rent reduction under section 71 while a tenancy is still in existence and that lump-sum compensation payments under section 83(d) should be considered where the tenancy has terminated.[37] Subject to one qualification, that approach is appropriate in this case. The qualification is that, in some circumstances (as set out below), it will be appropriate to have regard to the amount of rent that a tenant had paid when determining an appropriate level of compensation to be awarded under section 83(d).
[37] Watson v Gaudion [2009] ACAT 15 at [41], Costanzo and Laria v Watson [2010] ACAT 79 at [42], Saleem & Gizgeez v Abeygunaskara & Jeevanthan [2011] ACAT 9 at [8], Lee v Guo [2017] ACAT 60 at [47], [48]
61.The Appellant referred to the non-economic loss arising from “the frustration of that situation” and referred specifically to series of breaches that should have been remedied at beginning of the tenancy (as distinguished from repairs that were undertaken within the relevant period).[38]
[38] Transcript of Appeal hearing, page 39
62.The Appellant told the Original Tribunal, in effect, that because it was difficult to quantify an amount of compensation for each item (for example, the poorly functioning heater system, or the inoperative alarm system) the Appellant applied as estimate of the impact of that issue as a proportion of the daily rent of $60.00. The Appellant described that as “a random figure” which was calculated (“Because there’s virtually nothing to go off”) as what the Appellant “felt as a proportion of my daily rent.” The Original Tribunal understood the Appellant to be submitting that reference to the rental rate was a manner of calculating the compensation, given that the application was not (and could not be) for rent reduction. [39]
[39] Transcript of Original Tribunal hearing, page 78
63.In written submissions made to the Original Tribunal, the Respondent noted that the Appellant was paying $60.00 per day ($420.00 per week) in rent and that the total claim equated to $30.00 per day which, the Respondent submitted, was “an unreasonable claim.”
64.At the hearing before the Original Tribunal, Ms Rennie, an agent on behalf of the Respondent, took issue with some of the daily amounts sought by the Appellant and suggested there be some parity based on the relative impact that the Appellant perceived each compensable item had to another (for example, loss of privacy from a broken blind and reduced security from an inoperative alarm system).[40]
[40] Transcript of Original Tribunal hearing, page 31
65.Before the Appeal Tribunal, the Appellant submitted that where, as in this case, there were multiple breaches during the tenancy, the cumulative effect of those breaches (at least where they resulted in non-economic loss arising from the Appellant’s frustration with the situation) should be considered rather than looking at each breach in isolation[41]. The Appellant referred to decisions of differently constituted Tribunals in Costanzo and Laria v Watson[42] and Lee v Guo.[43]
[41] Transcript of Appeal hearing, pages 38-39
[42] Costanzo and Laria v Watson [2010] ACAT 79 at [42]
[43] Lee v Guo [2017] ACAT 60 at [88]
66.In Costanzo and Laria v Watson[44], the Tribunal adopted the approach of Justice Allsop of the Federal Court of Australia in Byrnes v Jokona Pty Ltd[45] that, in relation to the cumulative effect of the nine categories of complaints of breaches of the covenant for quiet enjoyment in a commercial lease, the Court had “borne in mind that each matter should not just be looked at individually, but also collectively or cumulatively.”[46] The matters in Costanzo and Laria v Watson that were dealt with in that way included the failure to give proper notice to vacate, a series of incidents over a month including phone calls and visits by the lessor or someone on his behalf to the tenant, failure by the lessor to provide certain documents to the tenant, and other breaches that caused the tenant to suffer stress and anxiety.[47] It should be noted that awards for specific amounts in relation to other items were also made in that case.
[44] Costanzo and Laria v Watson [2010] ACAT 79 at [42], [43]
[45] [2002] FCA 41
[46] Byrnes v Jokona Pty Ltd [2002] FCA 41 at [69]
[47] Constanzo and Laria v Watson [2016] ACAT 79 at [44], [43]
67.In Lee v Guo[48] the Tribunal took the same approach to a series of incidents involving the lessor and tenant. Individually the incidents were fairly minor in nature (and viewed in isolation would not constitute a breach of the tenancy agreement causing damage or loss to the tenant), but cumulatively they amounted to a significant interference with the tenant’s reasonable peace, comfort and privacy in the use of the premises.[49]
[48] Lee v Guo [2017] ACAT 60
[49] Lee v Guo [2017] ACAT 60 at [73]-[89], [93], [98]-[101], adopting the approach in Manour v Dangar [2017] ACAT 49 at [57], and comparing May v Medanic [2011] NSWCTTT 17
68.Those cases are distinguishable from the present case, except that they support the Appellant’s submission about how a Tribunal might assess compensation (if any) for general inconvenience. That matter is considered later in these reasons the decision (see [223] to [250]). Otherwise, it is appropriate to make specific awards for proven breaches of the residential tenancy agreement of the types contemplated by Standard Terms 54 and 55.
69.When assessing an appropriate amount of compensation for a particular breach or defect, the Tribunal may be guided (although it is not bound) by decisions in comparable cases.[50] That could include adjusting amounts awarded in earlier cases to account for inflation and other relevant factors.[51] Compensation for non-economic loss is to be assessed on the basis of prevailing standards in the community having regard to the subjective experience of the tenant.[52]
[50] See Watson v Gaudion [2009] ACAT 15 at [42], Bangura & Fan [2013] ACAT 38 at [89] But v Baldwin [2016] ACAT 9 at [51], Lee v Guo [2017] ACAT 60 at [94]
[51] See But v Baldwin [2016] ACAT 9 at [47], [48]
[52] See O’Brien v Dunsdon (1965-66) 39 ALJR 78 at 78
70.In summary, for those matters where the Appellant has established an entitlement to compensation, the Appeal Tribunal has proceeded on the basis that:
(a)section 83(d) of the RT Act is the relevant statutory provision, given that the lease was terminated;
(b)it is appropriate to assess separately the amount of compensation (if any) to be awarded for each item claimed separately except in relation to general inconvenience where a cumulative or global approach is more appropriate;
(c)in calculating the amount of compensation to be paid, it is appropriate to bear in mind the amount of rent that the Appellant paid as well as (where available) amounts awarded for compensation for the same types of loss in comparable cases.
71.We also observe, as other Tribunals have done, that the assessment of appropriate amounts of compensation is something about which reasonable minds may differ.[53]
Cleaning
[53] See e.g. Watson v Gaudion [2009] ACAT 15 at [42], But v Baldwin [2016] ACAT 9 at [32], Lee v Guo [2017] ACAT 60 at [94].
72.As noted earlier, the subject premises were painted immediately before the Appellant moved in, and there was dust in the premises as a result of that work. The Appellant noted on the Entry Condition Report that there was “white powder” on carpets, the skirtings were “covered in white powder” and white powder was also found on all power points and the NBN box. At the end of that report the additional comments included that “This property was dirty. Took two days to clean.”
73.According to the Appellant when the tenancy commenced, the subject premises were not ‘reasonably clean’ as required by Standard Term 54. Although, as noted in the Entry Condition Report, the evidence was that the Appellant spent two days cleaning, the claim was for 7.5 hours at $39.00 per hour, a total of $292.50. The Original Tribunal rejected the Appellant’s claim.
74.Two issues were raised on appeal:
(a)whether the Appellant is entitled to compensation for the cost of cleaning the subject premises at the time of occupancy; and
(b)if so, how the amount of compensation should be calculated.
75.The Appeal Tribunal watched a video recording of the subject premises made by the Appellant on Wednesday, 31 August 2016 when the premises were empty. For the Appellant, “the biggest issue … was the powder … Because it was just everywhere.”[54] As the Appellant put it, the recording showed “other cleanliness issues that may not have been the fault of the tradespeople”[55], including in the toilet and bathroom and along window tracks.[56]
[54] Transcript of Appeal hearing, page 16
[55] Transcript of Appeal hearing, page 4
[56] Transcript of Appeal hearing, pages 5, 16
76.In the Appellant’s submission, the fact that the Appellant agreed to occupy the subject premises before the Respondent had cleaned (or had the opportunity to clean) did not relieve the Respondent from providing premises that were ‘reasonably clean’ and hence did not relieve the Respondent from compensating the Appellant for the cleaning undertaken to restore the premises to that state.[57]
[57] Transcript of Appeal hearing, pages 34-35
77.Ms Rennie, from the Respondent’s agents, said that there was no dispute that there was dust after the tradesmen left which the Appellant had to clean. As she put it, “there was a lot of dust, I agree.”[58] However, she described the subject premises as otherwise ‘reasonably clean’ and said, “We are aware that there were some cleaning items, however, we don’t believe it was unreasonably clean as a whole.” [59]
[58] Transcript of Appeal hearing, page 12
[59] Transcript of Appeal hearing page 5
78.The Original Tribunal observed that opinions will differ about whether a property is ‘reasonably clean’ and stated:
What constitutes ‘reasonably clean’ will vary significantly according to the nature, age, proposed rent and circumstances of the subject premises.[60]
[60] Faulder v Tran [2018] ACAT 2 at [13]
Taken in isolation, that statement might be read as conflating the requirement for cleanliness with the state of repair. The nature, age and circumstances might be relevant factors to determining whether the premises are in a reasonable state of repair but they do not remove or substantively reduce the lessor’s duty to provide ‘reasonable clean’ premises no matter how humble the premises may be.
79.The Original Tribunal continued:
Like any other prospective tenant, the applicant was able to inspect the premises and decide for herself whether the premises were sufficiently clean for her purposes. If not, she was able to look elsewhere or to request the respondent to improve the cleanliness as a pre-condition to her renting the premises.[61]
[61] Faulder v Tran [2018] ACAT 2 at [13]
80.The Original Tribunal referred to circumstances where a tenant arrived and found the place unclean:
In situations of this kind, if a tenant believes that a lessor is in breach of clause 54(1)(b) of the Schedule and wishes the lessor to rectify the breach, it is incumbent upon the tenant to say as much. Where clause 54(1)(b) is directed to cleanliness “at the start of the tenancy”, a lessor must be given the opportunity to remedy the breach or to dispute it.[62]
[62] Faulder v Tran [2018] ACAT 2 at [14]
81.That position was reiterated later in the reasons for decision:
In my view, if a tenant chooses to rent premises without requesting the lessor to address any perceived lack of cleanliness, they take the cleanliness of the premises as they find it. That proposition is built into the tenant’s reciprocal obligation under clause 64 of the Schedule at the conclusion of the tenancy to “leave the premises ... in substantially the same state of cleanliness” as it was presented at the commencement of the tenancy.[63]
[63] Faulder v Tran [2018] ACAT 2 at [18]
82.The lessor’s duty is a strict one (‘must ensure’ that the premises are reasonably clean) and the RT Act fixes the date for compliance as being the start of the tenancy. If there is non-compliance at that time then there is breach by the lessor. If the premises are in a reasonable state of cleanliness then there is no breach by the lessor. Whether the premises were ‘reasonably clean’ is a question of fact and a dispute about it must be resolved by reference to the evidence.
83.The Appeal Tribunal viewed the video taken by the Appellant at the commencement of the tenancy and is satisfied on this evidence that, but for the dust and some other specific matters, the premises were ‘reasonably clean’. As the Original Tribunal did not view this video, it could not be taken to have come to any findings of fact based upon it.[64]
[64] The Original Tribunal was aware of the video and that its sole purpose was to deal with the cleaning issue by showing “the extent of how unclean” the subject premises were. Although the video contained “the most contemporaneous evidence,” the Original Tribunal was prepared to accept that what was written in the Entry Condition Report on 14 September 2016 was not materially different from the condition of the premises at the commencement of the tenancy. (Transcript of the Original Tribunal hearing, pages 9-10, 17)
84.In such circumstances the lessor’s breach does not occur once the tenant gives notice of the need for cleaning and the lessor has an opportunity to do it or to dispute it. The breach either existed or did not exist on day one of the tenancy. By contrast, the tenant’s duty to give notice to the lessor only came about in the context of repair issues that arises during the tenancy, as provided in Standard Terms 55 and 57 which are addressed below.
85.The Original Tribunal appeared to proceed on the basis that the lessor and tenant have the freedom to contract out of the mandatory provisions of the RT Act in relation to the cleanliness of the premises, and that the Appellant and Respondent did so in this case. However, the purpose of enacting tenancy legislation with mandatory essential terms was to negate that freedom to contract. Appropriate weight must be given to the plain words of Standard Terms 3 and 54(1)(b) and sections 8 to 10 of the RT Act, referred to earlier in these reasons for decision.
86.The Original Tribunal appeared to take the view that the tenant is precluded from bringing a claim for compensation at or after the end of the tenancy for the lessor’s breach of the cleanliness duty at the start of the tenancy.[65] However, there is nothing in the RT Act that imposes such time limits or that would otherwise override the six year time limits set out in section 11 of the Limitations Act 1985. It is quite common for lessors to delay until the end of the tenancy before bringing claims against tenants for breaches occurring during the tenancy. These claims are often brought as one consolidated claim against the tenant’s bond.
[65] Faulder v Tran [2018] ACAT 2 at [15]
87.Later in the reasons for decision the Original Tribunal wrote:
I reject the proposition that a tenant can rent premises and then, after termination of the lease, become entitled to compensation arising from the tenant choosing to clean the premises (either themselves or by engaging a third party) to a higher standard that the tenant prefers without having given the lessor an opportunity to rectify or deny the alleged breach.[66]
[66] Faulder v Tran [2018] ACAT 2 at [16]
88.It is appropriate to respond to the points made in that passage relating to:
(a)the standard of cleanliness below which compensation might be awarded (or above which compensation would not be awarded); and
(b)the opportunity for the lessor to mitigate their potential loss by ensuring that premises are reasonably clean.
89.The standard of cleanliness required in Standard Term 54 is not one that the tenant ‘prefers’, and a failure on the part of the lessor to attain that standard is not necessarily a breach by the lessor. The breach either occurred on day one or it did not. The question is whether the premises were ‘reasonably clean’. That is to be determined objectively accordingly to prevailing community standards.
90.In the present case it is clear that the Appellant’s claim for compensation (for 7.5 hours spent cleaning) was not for all the time that was spent cleaning the subject premises (two days). It is implicit in the claim that the Appellant was not seeking compensation for cleaning to higher standard than required by Standard Term 54, although the Respondent took issue with the claim as made (see [99] below).
91.If there is a breach then the innocent party is under a duty to take reasonable steps to mitigate their losses.[67] This duty arises both at common law and under section 38 of the RT Act, which provides:
A person who, apart from this section, would be entitled to compensation under this Act is not entitled to the compensation, or part of it, if the loss, or part of the loss, to be compensated could have been reasonably avoided.
[67] Anforth et al at [2.187.10]
92.The duty to mitigate is not an onerous one and the innocent party is not required to put themselves in a position where they sustain further losses in order to mitigate the original losses. In the present case, the Appellant had to adopt the course of action that was likely to produce the least loss to her. The choices were:
(a)to live in the unclean premises and suffer the damages equivalent to the rent reduction that would occur depending on the time the lessor took to do the cleaning; or
(b)do the cleaning herself to minimise this time.
93.This would invoke a comparison between:
(a)the cost to the lessor of hiring professional cleaners and the rent reduction attracted by any delay in completing the cleaning task; and
(b)the amount paid to the tenant for their time in doing the cleaning themselves.
94.Alternatively, the Appellant could have declined to move into the subject premises until they were reasonably clean. Had the Appellant done so, the Respondent would have incurred the cost of engaging cleaners and possibly a reduction in rental income for the untenanted cleaning period.[68]
[68] Transcript of Appeal hearing, page 60
95.The Original Tribunal cited Woolfe v Albekka[69] as authority for the proposition that a tenant should not be compensated for rectifying the lessor’s breach by carrying out the cleaning themselves. The Appeal Tribunal does not accept that this represents a correct statement of the law.
[69] Wolfe v Albekka [2011] ACAT 22 at [41]
96.In this case the Appellant’s actions reduced the Respondent’s potential damages. We have concluded that the Appellant is entitled to compensation.
97.The remaining question is how much compensation should be awarded to the Appellant.
98.At the hearing of the appeal, the Appellant agreed that the amount awarded for cleaning costs should not be calculated by reference to the hourly rate paid to her in her usual employment, and should not exceed what it would have cost the Respondent to engage a cleaner to do the work.[70] Nor did the Appellant claim compensation for all of the two days that she said she spent cleaning the subject premises.[71]
[70] Transcript of Appeal hearing, pages 31-32
[71] Transcript of Appeal hearing, page 32
99.Ms Rennie advised the Appeal Tribunal that a full end-of-lease clean (including professional cleaning of the carpets) was done at the subject premises before the Appellant moved in, and before the tradespersons painted the premises. Having:
(a)reviewed the Appellant’s video recording of the subject premises on 31 August 2016;
(b)referred to notes on the Entry Condition Report regarding cleanliness and condition, which (as noted earlier) included references to white powder on carpets, skirting boards, power points and the NBN box, and “other cleanliness issues” in relation to the toilet, bathroom and window tracks; and
(c)observed that no claim was made at that time for compensation for the cleaning,[72]
[72] Transcript of Appeal hearing, pages 56-57
the Respondent’s agents considered that the required cleaning would not have taken the 7.5 hours claimed by the Appellant[73] and suggested that a “vacuum and then dust over” would have been required, at a total cost of about $100.00.
[73] Transcript of Appeal hearing, pages 55-56
100.The Respondent’s agents contended that the Respondent was not given an opportunity to mitigate its losses at that time.[74] Had they been aware of cleaning issues, they would have engaged someone to do the work and mitigate the loss.[75] However, they acknowledged that had they been given that opportunity, they did not know how long it would have taken to clean the premises or at what cost.[76]
[74] Transcript of Appeal hearing, page 57
[75] Transcript of Appeal hearing, page 59
[76] Transcript of Appeal hearing, page 54
101.The Appellant contended that the Original Tribunal found that a lessor should be given notice of a breach of Standard Term 54 and that her failing to do so was problematic in this case.[77] In the Appellant’s submission, although the property should have been in a fit state from the start of the tenancy, the fact that a tenant gives the lessor notice of a breach should be taken into account in deciding whether the lessor is given an opportunity to rectify the breach (by restoring something to the state it should have been at the start of the tenancy) or to mitigate the loss.[78]
[77] Transcript of Appeal hearing, page 29
[78] Transcript of Appeal hearing, pages 29-30
102.Having regard to the audio visual, oral and written evidence in relation to this issue, the Appeal Tribunal is satisfied that something more than a vacuum and dust over was necessary to render the premises ‘reasonably clean’. We have concluded that the Appellant should be compensated for five hours of cleaning. The Tribunal has commonly awarded a time cost to lessors or tenants that do their own cleaning rather than incur the greater cost of hiring professional cleaners. It is usually allowed at $35.00 per hour.
103.In summary, it is clear that the Respondent was legally obliged to ensure that the subject premises were ‘reasonably clean’ at the commencement of the tenancy. In the circumstances outlined above (in particular, the Appellant’s urgent need for accommodation for herself and her three cats, and the practical necessity for the premises to be painted before she moved in), the Respondent did not have the opportunity (and was not asked by the Appellant) to clean the premises in the period between the tradespersons completing their work at the premises and the Appellant moving in. The Appellant notified the Respondent of those aspects of the premises that needed cleaning, but undertook the work herself as a practical measure. In doing so, she mitigated the Respondent’s cost of providing a cleaner and potentially losing rental income for the period it took to clean the premises. The Appellant also mitigated her potential losses by not incurring additional expense of finding alternative accommodation while the premises were cleaned to the requisite standard.
104.That practical approach, which was apparently acceptable to both parties, did not obviate the Respondent’s legal obligation to provide premises that were ‘reasonably clean’ nor did it nullify the Appellant’s entitlement to appropriate compensation.
105.For those reasons, the appeal on this point succeeds and the Appellant is awarded $175.00 in compensation.
Repair of dining room blind
106.The Entry Condition Report included reference to the vertical blinds that were intact but stained and discoloured and “Not working”. The metal cords for blinds were “broken, not working”. A rod was bent out of shape and there were no curtains. On 2 September 2016, two days after the tenancy commenced, the Appellant reported that the dining room blind was faulty. The Appellant subsequently added to the Entry Condition Report “Own curtain as temporary fixture. This is causing strain on the curtain rod.” At the end of that report, the additional comments included “broken blind creating privacy issue.”
107.By email dated 15 September 2016, the Appellant asked the Respondent’s agents for an update on the replacement of the blind in the dining room, noting “I am hanging my own curtain off the curtain rail as an interim measure, however, as the rail is not installed correctly, it is causing strain and may come off the wall.”
108.The Appellant contended that the lack of a working blind meant the neighbours could see directly into the living room of the subject premises, and that the faulty blind created difficulty in keeping the premises warm.
109.On 11 October 2016, a tradesman installed a new rod and curtain.
110.The Appellant claimed compensation of $2.50 per day for the 41 days from 2 September until 11 October 2016, a total of $102.50.
111.The Original Tribunal:
(a)characterised the repair of the blind as a non-urgent repair which, under Standard Term 57, the Respondent was required to repair “within 4 weeks of being notified of the need for the repairs,” that is, by 30 September 2016; and
(b)decided that the Appellant’s compensable loss was minimal given that the Appellant addressed the concern about lack of privacy by hanging a curtain from the curtain rail as an “interim measure.”[79]
[79] Faulder v Tran [2018] ACAT 2 at [22]
112.The Original Tribunal regarded the breach as minor, and allowed $1.50 per day for the 11 days beyond the four weeks period to effect that repair (1 October to 11 October 2016) to a total of $16.50.[80]
[80] Faulder v Tran [2018] ACAT 2 at [23]
113.On appeal, the Appellant took issue with the Original Tribunal’s determination that the compensable loss was minimal because the Appellant had hung a curtain of the curtain rail as an interim measure. The Appellant did not recall this matter being discussed at the hearing (see [38] above),[81] and explained to the Appeal Tribunal that a curtain was folded in half over the curtain rail and, given the slippery fabric backing of the curtain and the activity of the Appellant’s cats pulling at it, the curtain was routinely on the floor. The Appellant submitted that the arrangement was not a satisfactory interim measure, and it did not address the issue of privacy and retaining heat in the property.
[81] See also Transcript of the Original Tribunal hearing, pages 17-21
114.The Respondent accepted that the Appellant had adopted an interim measure that was not adequate, but submitted that the amount of compensation awarded by the Original Tribunal was fair having regard to the loss incurred (that is, irritation experienced) by the Appellant.[82]
[82] Transcript of Appeal hearing, pages 52, 57-58
115.The lessor’s duty in respect of repairs at the start of the tenancy is set out in Standard Term 54(1)(c), quoted above. In particular, the lessor must ensure that the premises including fittings are in a reasonable state of repair.[83]
[83] Anforth et al at [2.63.5]
116.The lessor’s duty for defects that emerge during the tenancy is contained in Standard Terms 55 and 57:
55(1)The lessor must maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the tenancy agreement.
(2)The tenant must notify the lessor of any need for repairs.
…
57 Subject to clause 55, the lessor must make repairs, other than urgent repairs, within 4 weeks of being notified of the need for the repairs (unless otherwise agreed).
117.Standard Terms 55 and 57 are also framed in mandatory terms, that is, the lessor ‘must’ maintain the premises and make the repairs within this statutory time frame unless there is agreement with tenant for a longer period. The ‘reasonableness’ requirement goes to the state of the repair and not the efforts made by the lessor, that is, the lessor must undertake the maintenance and repairs and the result must be to render the premises in a ‘reasonable state of repair’. As the Original Tribunal noted[84], it is not sufficient that the lessor take reasonable steps if that does not result in the premises being in a ‘reasonable state of repair’.
[84] Faulder v Tran [2018] ACAT 2 at [25]
118.Whether premises are in a ‘reasonable state of repair’ at the commencement of the tenancy is a question of fact.
119.In this case, the broken blind in the dining room was recorded in the Entry Condition Report provided by the Respondent’s agent to the Appellant at the start of the tenancy. The Respondent must be taken to have known of the broken blind, as well as the damage to the curtain rod and absence of curtains also noted in the Entry Condition Report. As it happens, the Appellant reported the broken blind on 2 September 2016 and noted in the Entry Condition Report not only the broken blind but its implications for her (“creating privacy issue”) and what she had done to mitigate the implications of the broken blind (“Own curtain as temporary fix”), while noting that her interim action was “causing strain on the curtain rod.” Those notifications and subsequent communications were not necessary to enliven the Respondent’s obligations.
120.The blind was broken from day one of the tenancy. This finding of fact enlivens Standard Term 54(1)(c) and is a breach from day one. Consequently. Standard Term 57 was not the applicable provision and the Respondent did not have four weeks to carry out the repairs.
121.It follows that the Appellant is entitled to compensation for the period from the commencement of the lease until the repair was effected, a period of 41 days. Despite the additional evidence provided to the Appeal Tribunal by the Appellant about the unreliability of the interim temporary curtains measure, we agree with the Original Tribunal that the amount assessed as compensation for loss incurred (including the irritation experienced) by the Appellant arising from the broken blind should be relatively minor. On that basis we award $1.50 for the 41 days, a total of $61.50.
Alarm
122.The Entry Condition Report included reference to “SECURITY SYSTEM: Chubb alarm panel – DSC Security alarm system.”
123.In an email to the Respondent’s agents on 2 September 2016, the Appellant stated:
Security is probably my main concern with any property (hence the request for keys, etc).
In relation to the alarm, I assumed it was working given the sensors and keypad have working lights. The alarm was one of the positive features of the property particularly as I live on my own. There was no mention at the inspection, sign-up or in the tenancy agreement that it wasn’t working.
124.The Appellant noted on the Entry Condition Report that there was “no code or instructions for alarm.” At the end of that report, the additional comments included that there were issues with “no alarm code or instructions.”
125.By email dated 15 September 2016, the Appellant asked the Respondent’s agents for an update on the alarm. The agents subsequently contacted Chubb Home Security and sent a work order on 28 September 2016. They attended on 9 November 2016, reset the alarm codes and showed the Appellant how to use the system.
126.On the basis that the security alarm was an important aspect of the subject premises for a single person living alone, the Appellant claimed compensation for the period of 68 days from 2 September until 9 November 2016 at $5.00 per day, a total of $340.00.[85]
[85] Faulder v Tran [2018] ACAT 2 at [24]
127.The Appellant told the Original Tribunal that as a person living alone, security was important. The loss caused by the alarm not working was the reduced security when the Appellant was not at the property and “more so … when I’m in the property at night and … wanting to be safe.”[86]
[86] Transcript of the Original Tribunal hearing, page 31
128.At that hearing, Ms Rennie for the Respondent indicated that the Respondent was not aware of the state of the alarm until 2 September 2016 when the agents received the report from the Appellant. Apparently, having received that report, the agents contacted the previous tenants to enquire whether they had used the alarm system.[87] Once the agents became aware that the previous tenants did not have that information, they initiated the process for the alarm to be attended to.[88]
[87] Transcript of the Original Tribunal hearing, page 23
[88] Transcript of the Original Tribunal hearing, page 25
129.Ms Rennie said that she was “going to be completely honest” and volunteered that with an Entry Condition Report they check as much as they can but because alarm systems vary a lot and agents do not know how they function they tend to say the alarm system is working.[89]
[89] Transcript of the Original Tribunal hearing, pages 23-24
130.When asked by the Original Tribunal whether they do not check an alarm system, Ms Rennie replied “Alarm systems? Unless it’s immediately obvious how to use it honestly, no.” She continued:[90]
Again, I just think yes, isn’t [sic it’s] not something that’s necessarily tested because we, in my experience of alarm systems vary. The age varies, the way they function varies and I wouldn’t be confident that I’m giving the right information.[91]
[90] Transcript of the Original Tribunal hearing, page 24
[91] Transcript of the Original Tribunal hearing, page 25
131.In response to further questioning from the Original Tribunal, Ms Rennie said that it was “very common” that alarm systems were “probably one of the only things” that were not checked before a property is let. In part, at least, it seems that with some back to base systems if there is no account connected it is not possible to test them. There is also a reluctance to set an alarm system off while the agent is on the property.[92]
[92] Transcript of the Original Tribunal hearing, page 26
132.The Appellant described the alarm system at the subject premises as being activated by movement detected by sensors which would, she hoped, cause a person to run.[93]
[93] Transcript of the Original Tribunal hearing, page 27
133.At the hearing before the Original Tribunal, Ms Rennie did not try to defend the delay from 1 October until 9 November 2016.[94] Rather, she agreed that it took “too long” for the alarm to be repaired.[95]
[94] Transcript of the Original Tribunal hearing, page 30
[95] Transcript of the Original Tribunal hearing, page 22
134.The Original Tribunal found that the Respondent’s agent dealt with the issue with reasonable diligence, but that did not excuse the breach[96] and the tenant continued to pay the rent without the benefit of the alarm.[97]
[96] Citing Withers-Norris v Pashello [2016]ACAT 95 at [90]-[91]
[97] Faulder v Tran [2018] ACAT 2 at [25]
135.In assessing the amount of compensation to be awarded, the Original Tribunal stated that:
(a)many residential premises do not have alarms;
(b)there was no evidence that the Appellant had enquired about the alarm system (or how to use it) before renting the subject premises;
(c)although an activated alarm might have served as a deterrent to potential thieves, the locks on the doors and windows meant that the premises could still be made secure;
(d)the absence of the alarm was not a significant detriment to the Appellant’s use and enjoyment of the subject premises;
(e)the re-coding of the alarm was not an urgent repair; and
(f)under Standard Term 57 the alarm needed to be repaired by 30 September 2016.
136.The Original Tribunal allowed $80.00 in compensation, calculated at $2.00 per day for the 40 days between 1 October and 9 November 2010.[98]
[98] Faulder v Tran [2018] ACAT 2 at [28]
137.On appeal, the Appellant submitted that the evidence (at Exhibit A1 pages 2-5) demonstrated that she asked for the information about the alarm when she moved into the property.[99]
[99] See extract quoted at [123] above
138.In the Appellant’s submission, the Original Tribunal appears to have addressed the issue of the alarm under Standard Term 54(1)(b) (‘reasonably secure’), but should have addressed it under Standard Term 54 (1)(c) (‘in a reasonable state of repair’). The Appellant specifically advised the Appeal Tribunal that she did not assert the property was not reasonably secure. Rather, the alarm was not usable because it needed to be recoded and instructions had to be provided.[100] The alarm was not in a usable state at the time the tenancy commenced. It could not be used. Further, it was irrelevant whether other properties have alarms.
[100] Transcript of Appeal hearing, page 40
139.The Respondent submitted that the Original Tribunal was correct in:
(a)determining that the Appellant had not enquired as to how to use the alarm upon renting the premises (no evidence had been provided otherwise);
(b)taking into account circumstances such as whether other properties have alarms because a consideration of the impact and necessity of the alarm assists in determining a reasonable amount of compensation. In determining the value an alarm can add to the property and the impact of its loss, it is logical to consider what other homes may have available; and
(c)finding that the premises were reasonably secure and the absence of the alarm was not of significant detriment to the Appellant’s enjoyment of the premises.[101]
[101] Transcript of Appeal hearing, page 58
140.Whether premises are in a ‘reasonable state of repair’ at the commencement of the tenancy is a question of fact. If they are not, then the failure of the lessor or tenant to detect the defects does not operate to negate the existence of the defects. For example, it might be that the hot water system did not work on day one but neither the lessor nor the tenant turned on the hot water tap to check it at the time of the original inspection. There can be any number of illustrations of the fact of defects going undetected by the parties until a short time into the tenancy.
141.The lessor has possession of the premises immediately before the first day of a new tenancy. The lessor has the opportunity to carry out all required inspections. In fact Standard Terms 21-23A set up a regime to ensure that this kind of process occurs. The lessor has notice of any defect that has already been brought to their attention before the start of the tenancy including by the new tenant orally or in notations on their Entry Condition Report. The lessor has a duty to have remedied before the start of the tenancy such of these defects as cause the premises not to be in ‘a reasonable state of repair’.
142.The lessor’s duty extends to inspecting the premises and taking all steps to check the state of repair of the premises and its fixtures and appliances that could be undertaken by a person who is not a specialist tradesperson. In short this requires that the lessor check things that are visually obvious or that only require a switch to be turned on.[102]
[102] Anforth et al at [2.63.4]
143.In the present case, the defect was apparent very early in the tenancy. Whether or not the Respondent could, or should, have known of it before the tenancy commenced, the Appellant referred to it on and after 2 September 2016.
144.The Appeal Tribunal is satisfied that the alarm system was part of the premises for the purposes of Standard Term 54 and that it was not in a ‘reasonable state of repair’ (in the sense that it could not be used until a qualified tradesperson recoded it and provided instruction in its use). Consequently, the Appellant is entitled to compensation for the period from 2 September until 9 November 2016, a period of 68 days.
145.Although a functioning alarm system was not essential for the security of the subject premises, so far as the Appellant was concerned it was clearly a desirable feature of those premises. That much is apparent from the Appellant’s correspondence with the Respondent’s agents between 2 and 15 September 2016. We are satisfied that an award of $2.00 is appropriate for each day when the alarm systems was inoperative.
146.Accordingly, the appeal is allowed on this point and an award of compensation in the sum of $168.00 is made.
Keys and security
147.There was evidence before the Original Tribunal[103] that:
(a)on 2 September 2016, the Appellant reported to the Respondent’s agents by email that she did not have keys for the front or rear security screen doors or to some of the window locks;
(b)having been lent the agent’s “office set” of keys, the Appellant advised the Respondent’s agent on 8 September 2016 that one of the keys fitted the rear screen door;
(c)the Appellant noted on the Entry Condition Report that there was no key for the security door and, at the end of that report, the additional comments included that the Appellant was “not provided with all keys”;
(d)by email dated 15 September 2016, the Appellant asked the Respondent’s agents for an update on the keys for the doors and window locks;
(e)on 26 October 2016, the Respondent sent an email to his agent advising that he thought he had found the keys and asked if he could drop them in one evening;
(f)the Respondent proposed attending on the subject premises on 7 November 2016 with possible keys, but that was postponed to 11 November 2016 at the Appellant’s reasonable request and, on that day, the Respondent’s agent provided the key to the front screen door.
[103] See Faulder v Tran [2018] ACAT 2 at [29] and exhibited documents
148.The Appellant claimed $350.00 calculated at $5.00 per day for 70 days between 2 September and 11 November 2016.
149.The Original Tribunal accepted that the Respondent was required under Standard Term 54(1)(d) to ensure that, at the start of the tenancy, the subject premises were ‘reasonably secure’. The Original Tribunal:
(a)was not persuaded that the provision of a key to the front or rear security screen doors was necessary for that purpose (there being no suggestion that the main front and rear doors were not lockable or that keys to the main doors were not provided from the outset);
(b)found that the screen doors were functional to the extent that they could be open and closed;[104]
(c)accepted that the screen doors were lockable with a key and the Appellant was reasonably entitled to have a key or keys in order to lock them as part of the rented premises;
(d)was not persuaded that the absence of a key to a screen door was a significant detriment to the Appellant’s use and enjoyment of the subject premises;
(e)observed that many premises have screen doors that are not lockable, or do not have screen doors;
(f)assumed that the front screen door could also be locked from the inside using the manual catch.
[104] Faulder v Tran [2018] ACAT 2 at [33]- [35]
150.The Original Tribunal allowed a total of $38.00, being $1.00 per day for 38 days from 1 October until 7 November 2016.[105]
[105] Faulder v Tran [2018] ACAT 2 at [36]
151.On appeal, the Appellant submitted that, although the legislation does not address the issue of keys, it appears reasonable that a lessor provide a tenant with all keys at the commencement of a tenancy. It is not a repair issue or a failure to provide a property that is reasonably secure. In those circumstances, it is irrelevant whether other properties have screen doors or lockable screen doors.
152.The Appellant also stated that the agent did not notify her that the agent had the keys until she attended the routine inspection on 11 November 2016. Had the agent notified the Appellant that the keys were available, the Appellant could have arranged collection, as she had done previously. In her submission, however, because the agent had not notified her that they had the keys until 11 November, she had not been given the opportunity to collect them on and should be compensated for those days beyond 7 November.[106]
195.There was a substantial delay between the Appellant notifying the Respondent’s agents about the birds and the tradesperson blocking gaps in the roof. However, given that the Appellant did not observe any birds entering the premises during that period, she did not suffer compensable loss from bird activity. That the Appellant chose not to use the ducted heating during the warmer months on the basis that to do so might assist birds to enter the premises was a decision based on the Appellant’s analysis of the way in which birds might travel from the roof cavity to the dining room. No evidence was given to the Tribunal to support that conclusion, which is contradicted by the inspection report of a tradesperson.
196.The appeal in relation to this matter is dismissed.
The heating system
197.The Appellant claimed compensation to a total of $2,290.00 in relation to what was contended to be an ineffective heating system.
198.The Appellant contended that, having reported a lack of hot air coming from the lounge room heating duct by way of an email dated 6 October 2016, the issue was not resolved before the end of the tenancy on 20 June 2017. The Appellant contended that the property was extremely cold and that the heating system was unable to warm the property to a satisfactory temperature.
199.When calculating the amount claimed, the Appellant accepted a 28 day period for the respondent to conduct the necessary repairs as a non-urgent repair and hence claimed compensation of $10.00 a day for a period of 229 days.
200.The Original Tribunal:[122]
(a)quoted the Appellant’s email dated 6 October 2016 which stated:
Just to let you know that Nick came to measure for the curtain yesterday and we got to discussing the birds coming through the ducted vent. Nick suggested I let you know that the reason there is very little air coming through the vent in the lounge room is likely because there is a hole in the ducting (caused by birds). This means I am effectively heating the ceiling space only. I will mention this to the roofer but suspect it might be an issue that needs attention by ducted heating installers.
(b)concluded that the email did not fairly represent notification that the heating system was in need of repair;
(c)stated that the possibility of there being “a hole in the ducting (caused by birds)” was eliminated by later inspection of the duct work which found that not to be so;
(d)noted that an email on 2 June 2017 advising that the Appellant would be shortly issuing a notice of intention to vacate the subject premises included the Appellant’s “opinion that the property isn’t habitable and that, whilst the heating system is working, it is totally inadequate for heating the property to a habitable temperature” (and provided data regarding the Appellant’s testing of the temperature in the premises from time to time in support of the claim);
(e)noted that the Respondent contended, and the Appellant agreed at the hearing, that 2 June 2017 was the first time the Appellant had reported that the ducted heating system was not heating up to the set temperature;
(f)the Respondent’s agent engaged Heating and Cooling Services, who attended the premises and their invoice dated 8 June 2017 states “serviced the burners and injectors, all tested okay, working fine including the thermostat is working fine;”
(g)noted that the Appellant vacated the premises on 20 June 2017.
[122] Faulder v Tran [2018] ACAT 2 at [53]-[58]
201.In rejecting the Appellant’s claim, the Original Tribunal referred[123] to:
…circumstances where the respondent promptly attended to the applicant’s notification of the (perceived) need for repairs and found no evidence of anything in need of repair, and where the applicant vacated the premises 18 days after notifying the respondent of her opinion that the heating system was inadequate.
[123] Faulder v Tran [2018] ACAT 2 at [59]
202.On appeal, the Appellant made a series of statements in relation to factual matters which were, in summary, that:
(a)there were two issues with the heating system – the birds, and the lack of air coming from the lounge room vent;
(b)whatever was the cause, there was a significant problem that led, in part, to the subject premises being extraordinarily cold in winter;
(c)the Respondent’s agent was notified of an issue with the lounge room in an email sent on 6 October 2016, at the routine inspection on 11 November 2016, and via emails on 14 March and 20 April 2017;
(d)there was evidence filed by the Respondent to indicate they were aware of the issue in the vent before June 2017;
(e)the tradesperson who attended to check the duct work was unable to see all of the duct work, and no one examined all of the duct work;
(f)at no stage during the tenancy did any tradesmen ascertain what the issue was with the vent (by which we understand the Appellant to mean the cause of the inadequate heating provided via the vent);
(g)at no stage during the tenancy was the issue with the ducted heating vent in the lounge room addressed.
203.The Appellant submitted that the heating system was not repaired. There was still an issue with the airflow from the vent. The tradesperson serviced the unit but did not repair it.
204.On that basis, the Appellant submitted that there did not appear to be a basis for finding that the duct work was not damaged.[124]
[124] See also Transcript of Appeal hearing, pages 23-28
205.The Respondent submitted that the Original Tribunal was correct because:
(a)there was no evidence that the Appellant reported the property being cold or that the heater was not functioning;
(b)Air Turners confirmed there was no damage to the ducting;
(c)Heating and Cooling Services attended and serviced the system, and no repairs or faults were reported.
No fault was found or recorded despite the number of tradespeople who went through the subject premises and the Appellant advising them that the vent was not working effectively.
206.In addition to the email of 6 October 2016 (quoted above), there was documentary evidence before the Original Tribunal that:
(a)on 26 October 2016, the Appellant sent an email to the Respondent’s agent stating that she had not heard from various contractors and the “inability to use the heating during daylight hours is problematic, especially in the mornings (when it is 11 degrees in the house) and the weekends (it was 14 degrees in the house on the weekend)”;[125]
[125] The Appellant acknowledged at the hearing before the Original Tribunal that the concerns expressed in the message were a function of her not having the heating on because of the issue with the birds. (Transcript of the Original Tribunal hearing, page 68)
(b)on 26 October 2016, the agent replied that she could not “book the heating out until we stop the source of the birds entering the property;”
(c)the routine inspection report of 11 November 2016 noted as a maintenance item that the tenant “has had birds entering the property through the roof space and into the heating duct work and into the property. I will arrange for a pest control company to investigate the entry of the birds then a heating company to repair the duct work”;
(d)on 14 March 2017, the Appellant sent an email to the agent in relation to birds entering the premises when the heating system was on and reiterating the Appellant’s concern that “the birds may have damaged the ducting because it does not vent properly to the lounge room (i.e. it does not blow hot air as it should).” The email continued “I am not using the heating during the day until the issue is resolved, mainly because I am concerned I may not get to a bird before my cats. … I don’t know how the ducted system works but perhaps there is a way of covering the system in the roof space so birds cannot enter;”
(e)on 20 April 2017, the Appellant sent an email to the agents about the “still unresolved” bird issue, and continued “I am still unable to use the ducted heating during the day until the issue is resolved. In addition, and as mentioned previously, it appears a bird may have damaged one of the heating ducts as it does not vent properly in the lounge room. Presumably, this cannot be addressed until the bird problem is resolved;”
(f)on 26 April 2017, the Appellant gave a notice to remedy on the basis that the Respondent had failed to maintain the premises in a reasonable state of repair (Standard Terms 55) and had failed to make repairs within the required timeframe (Standard Terms 57) in relation to the ducted heating;
(g)on 26 April 2017, the agents advised the Appellant by email that a tradesperson had blocked off the entry two holes on the gable end of the roof so that birds could no longer enter the roof cavity area, and that a tradesperson from Air Turners would be in contact with the Appellant soon to see if there was any damage to the ducted heating tubing;
(h)the tradesperson inspected the heating unit and ducting on Thursday 4 May 2017 and reported that the “ducting is all ok;”
(i)on 1 June 2017 the Respondent’s agents created a work order for Heating and Cooling Services to “investigate the ducted heating system.” The document stated that the tenant had reported that the temperature in the evening in the dining room is between 11 and 13 degrees and the heating system had to run for 2½ hours to raise the temperature to 17 degrees. The tenant had also reported running the heating system yesterday from 6.00 until 7:30am and at 6:30am it was 11 degrees in the dining room and at 7:30am was 12 degrees in the dining room even though the tenant set the heater for 20 degrees. In requesting that the ducted tubing be checked “to make sure there is no damage,” it was noted that the tenant “recently had an issue with birds flying into the roof cavity and coming out the ducted air vent down stairs;”
(j)on 2 June 2017, the Appellant wrote to the agent advising that she would be issuing a notice of intention to vacate based on the lessor’s failure to repair and stated that “whilst the heating system is working, it is totally inadequate for heating the property to a habitable temperature.” The Appellant advised that she had been testing the temperature in the property with and without ducted heating and that even when the heating was run for 2½ hours the temperature did not go above 17 degrees;
(k)in the same message the Appellant expressed the view that the property was “poorly designed” and stated that it is no better in summer when it is “unbearably hot;”
(l)the agent replied by email on 2 June 2017 stating that the Appellant’s email was “the first time you have notified me that the heating system is not working effectively” and advising that someone from Air Turner would contact the Appellant to arrange a time to investigate the issue;
(m)the Appellant replied by email that day to the effect that she had notified the agency “last year” that there was “an issue … with the venting from one of the ducts” and it was her “(unprofessional) view that the heating system is working as it should. It is the property that is the problem;”
(n)in an email to the agent dated 5 June 2017, the Appellant stated that (as indicated in the notice to remedy) it was the heating system that needed to be fixed, in particular whatever was causing the heating not to vent properly in the lounge room. The Appellant confirmed that the issue with the temperature of the property was “something that was only raised last week” and reiterated that she suspected the heating system “is doing the best it can, however, the heat loss from the property is too great;”
(o)by email dated 7 June 2017, the agent advised the Appellant that the heating technician who inspected the ducted heating system reported “Cleaned the burners and injectors, then tested the pilot and all tested ok and working fine including the thermostat is working fine as well. Tech advised tenant that he has now been serviced and all ok.”
207.At the appeal hearing, the Respondent’s agents seemed to accept that an issue with the ducted heating was reported in 2016. However, they had someone attend the premises and that person did not substantiate the Appellant’s claims and said there was no issue.[126] The agents also confirmed that 2 June 2017 (after the notice to remedy) was the date of the first report that the heater was not heating to the set temperature (as contrasted with the heater not working at all).[127]
[126] Transcript of Appeal hearing, page 63
[127] Transcript of Appeal hearing, page 63
208.The Appellant acknowledged that, at the original hearing, it was agreed that in June 2017 the Respondent was first notified that the Appellant considered that the subject premises were not being heated to the requisite temperature.[128]
[128] Transcript of Appeal hearing, page 65. Transcript of the Original Tribunal hearing, pages 65-68
209.However, the Appellant distinguished between that issue and the concern expressed about the duct that did not vent properly in the lounge room (possibly, as the Appellant thought, because birds had damaged it). The Appellant gave evidence that (as the documents summarised above confirm) she had raised the duct vent issue with the Respondent’s agent at an inspection of the subject premises and again in March 2017. The notice to remedy was for the lounge room vent that did not vent the air sufficiently. Indeed, the Appellant stated that air did not blow out of it. That was the issue which, in her submission, no one addressed and hence it was not remedied. That was the basis on which a notice to vacate was ultimately issued. Related to that was the consequential inadequacy of the heating.[129]
[129] Transcript of Appeal hearing, pages, 65-66
210.The Appellant submitted that some matters covered by Standard Term 54 might not be noted at the start of the tenancy. For example, the fact that a heater is faulty might not be apparent (at least to the tenant) until the tenant attempts to use the heater sometime after the tenancy commences. The Appellant submitted that if it can be shown that the lessor knew or ought to have known at the commencement of the tenancy that the heater was not working, then Standard Term 54 applies. Consequently, the breach runs from day one of the tenancy (in this case, 31 August 2016). Otherwise Standard Terms 57 and 59 will apply from the time when the fault became evident.[130] Whether something was working at the commencement of the tenancy is a question of fact.[131]
[130] Transcript of Appeal hearing, pages, 18-19
[131] Transcript of Appeal hearing, page 20
211.The Appellant accepted that, in light of the decision of the High Court in Northern Sandblasting Pty Ltd v Harris,[132] a lessor will have constructive notice of anything that they could have discovered by looking and turning on switches, but not something that would have required tradesperson or specialist to check.[133]
[132] Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313
[133] Transcript of Appeal hearing, pages 19-20. Anforth et al at [2.63.4]
212.If a tenant becomes aware that something does not work (in breach of Standard Term 54) but does not inform the lessor, that might affect the amount of compensation (if any) to be paid to the tenant because they failed to take appropriate action to mitigate their loss.[134]
[134] Transcript of Appeal hearing, page 35
213.It is clear from the correspondence and oral evidence that the issue of whether birds were entering the premises via heating ducts and the state of repair and operation of the ducted heating system were linked in the Appellant’s mind and in many of the communications to and from the agents, and between the agents and tradespersons.
214.However, the apparent inadequate operation of the ducted heating in the subject premises was a distinct issue, irrespective of its cause.
215.It was the lessor’s duty to provide the heating system in a working condition at the commencement of the tenancy and to maintain it during the tenancy (excluding any damage caused by the tenant). The ducted heating should blow hot air to heat the unit to the programmed temperature. It might not be working properly for any number of reasons, but it was not the tenant’s duty to perform that diagnosis. Even in the case of a defect arising during the tenancy, the tenant need only put the lessor on notice that the heating is not working property. The tenant does not have to put the lessor on notice of the cause of the functional failure of the heater.
216.The Appellant’s email of 6 October 2016 put the lessor on notice that the heater was not functioning properly and suggested that the issue needed attention by ducted heating installers. It was for the lessor to determine why the heater was not functioning and arrange for it to be repaired.
217.The evidence before the Original Tribunal did not establish that the ducted heating system was not in a reasonable state of repair at the commencement of the tenancy. Consequently, the Original Tribunal was not in error in not finding a breach of Standard Term 54. At most, the Appellant could seek an award of compensation if Standard Terms 57 and 59 applied.
218.The Respondent was on notice from 6 October 2016 that the ducted heating system was not working properly. At that time of year, it could be considered a non-urgent repair. It is clear that, by 11 November 2016, the Respondent’s agent contemplated taking no further action until the issue involving the birds was resolved. It was not until 26 April 2017 that the holes in the roof were closed to prevent birds entering. Again, the issue of the inadequate operation of the heating system and the access by birds to the lounge room were apparently conflated by the parties.
219.The Appellant’s oral and written evidence demonstrates that by late May 2017 she was living in premises that were much colder than they would have been had the heating system worked adequately. The Appellant gave clear notice of that situation in the email of 2 June 2017, and provided additional information subsequently. At the appeal hearing, the Respondent’s agents expressly did not disagree with the temperatures in the premises recorded by the Appellant in late May and early June 2017.[135]
[135] Transcript of Appeal hearing, pages 61, 64
220.The Respondent’s agents responded promptly by engaging tradespersons. However, it seems that in the period between 2 and 20 June 2017, although the system was serviced, the defect was not identified or repaired.
221.The evidence establishes that the ducted heating system was defective. The Appellant should receive some compensation for the failure by the Respondent to repair the defective system within 28 days after receiving notice of it from the Appellant. On the evidence before the Original Tribunal and the Appeal Tribunal, the amount of compensation should be based on:
(a)an unquantified degree of inconvenience experienced by the Appellant for the period from when the repairs should have been made (28 days after 26 October 2016, being 23 November 2016) until 2 June 2017 - noting that the inconvenience was (paradoxically perhaps) not experienced fully for much of that period because the Appellant apparently did not use the system during the day until late April when the holes in the gable end of the roof were blocked; and
(b)a more specified degree of discomfort experienced by the Appellant for the remainder of the tenancy between 2 and 20 June 2017.
222.The appeal is allowed. Having regard to the evidence in these proceedings and awards in comparable case(s) the Appeal Tribunal has concluded that the Appellant is entitled to an award of compensation calculated as follows: 188 days at $1.00 and 18 days at $10.00 a total of $368.00
Breach of quiet enjoyment and general inconvenience
223.The Appellant claimed compensation of $500.00 for the general inconvenience of:
(a)having to take time off work on multiple occasions to be present at the premises when a tradesperson attended the property;
(b)tradespersons attending the premises without notice; and
(c)having repeatedly to email the Respondent’s agent regarding repair issues.[136]
[136] Faulder v Tran [2018] ACAT 2 at [61]
224.The Appellant contended that such inconvenience is compensable under section 83(d) of the RT Act which empowers the Tribunal, in relation to a tenancy dispute, to make an order requiring the payment of compensation for loss of rent “or any other loss caused by the breach of a residential tenancy agreement.” In the Appellant’s submission, if the subject premises had been in a reasonable state of repair from the commencement of the tenancy, the Appellant would not have needed to take time off work to be present when the work was undertaken.
225.At the hearing before the Original Tribunal, the Appellant noted that her claim of $500.00 was not calculated by reference to an hourly rate for her employment but was a rounded up figure for attending the subject premises on specified occasions when tradespersons were there, the numerous emails he sent to the Respondent’s agent and the “intense frustration at the whole process.”[137]
[137] Transcript of the Original Tribunal hearing, pages 68-69
226.The Appellant was also careful to avoid claims in relation to her attendance at the premises other than those which, in her submission, were to repair defects which should have been repaired before the commencement of the tenancy. In other words, she distinguished between those activities and regular maintenance activity in respect of which she would not have claimed, and did not claim, compensation.[138]
[138] Transcript of the Original Tribunal hearing, pages 73-75
227.It is clear from the transcript of the hearing that the Original Tribunal was careful to avoid any possibility that the Appellant, having secured compensation for a specific matter, would be compensated again for the same loss under a separate heading of general inconvenience.[139]
[139] Transcript of the Original Tribunal hearing, pages 69, 77
228.In response to a question from the Original Tribunal, the Appellant said that any apportionment of compensation for general inconvenience should be on the basis that the inconvenience of taking time off work was greater than that of sending emails to the Respondent’s agents.[140] For the reasons set out earlier in these reasons for decision (see [56] to [60] and [69], [71]) that is the approach taken to this appeal. Section 83(d) empowers the Tribunal to make an order requiring the payment of compensation for any loss ‘caused by the breach of a residential tenancy agreement.’
[140] Transcript of the Original Tribunal hearing, page 76
229.The Respondent did not disagree that the Appellant had suffered inconvenience in relation to specific items but submitted that the compensation for those items would cover the level of inconvenience. The Respondent opposed any compensation for the Appellant taking time off work because there was no requirement for her to be present when tradespeople attended the premises. Further, reporting maintenance issues is part of the tenancy agreement and responding to maintenance is also part of the tenancy agreement.[141]
[141] Transcript of the Original Tribunal hearing, pages 70-71
230.In support of that claim, the Appellant provided to the Original Tribunal correspondence advising of the seven days during the tenancy when the Appellant needed to arrive at work late or leave work early in order to be present at the subject premises when tradespersons were attending the property. Although the Appellant agreed that she did not suffer any financial loss (for example, lost wages) on those occasions, it was time that the Appellant had to make up.[142]
[142] Faulder v Tran [2018] ACAT 2 at [62]
231.Reference was made to Standard Term 52 which provides:
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.
232.The Original Tribunal rejected the claim because, in summary, although compensation can be payable to a tenant for non-economic loss arising from a lessor’s breach of a tenancy agreement (including a breach of Standard Term 52), the inconvenience relied on by the Appellant did not arise from the Respondent’s breach of the tenancy agreement. Rather, the inconvenience experienced by the Appellant in attending the subject premises to be present when the tradesmen came to do work arose from the Respondent’s efforts to rectify the alleged breaches. They inconvenience did not arise from the breaches themselves or a failure to rectify them.[143]
[143] Faulder v Tran [2018] ACAT 2 at [65]-[68]
233.The Original Tribunal also:[144]
(a)rejected the proposition that a lessor acts in breach of Standard Term 52 by arranging for a tradesperson to attend the rented premises to carry out repairs, especially where the tenant has reported the need for the repairs and asked for them to be carried out;
(b)held that the Appellant did not need to be present when tradespersons attended, but chose to be there;
(c)rejected the proposition that a tenant should be compensated for the inconvenience of having to notify a lessor of the need for repairs, even if notification occurs on more than one occasion.
[144] Faulder v Tran [2018] ACAT 2 at [69]-[71]
234.On appeal, the Appellant submitted that, had the Respondent fixed the blind and arranged for the alarm to be in working order before the tenancy commenced, there would have been no need for the Appellant to take time off work on three occasions. Further, the Appellant stated that each work order sent by the agent to a tradesperson (also sent to the Appellant) included a statement that the tradesperson was to contact the Appellant to arrange access. It was not until the last month of the tenancy that the agent indicated she could be present to allow the tradespeople access to the subject premises.
235.The documentary evidence supports a finding that the tradespersons were asked to contact the Appellant to arrange access to the subject premises. For example, the work order created on 28 September 2016 for the replacement of the curtain rod stated “Please contact tenant for access.”
236.The work order created on 28 September 2016 for the security alarm recoding stated “Please contact the tenant for access.” The service report stated “Reset codes and showed customer how to use system.” The Respondent noted that the Appellant requested to be present when Chubb Security attended to repair the alarm, but submitted that she did not need to attend as Chubb Security is insured, reputable and was happy to collect the keys from the agent’s office, do the work, provide instructions and return the keys to the agents’ office.
237.Other work orders created on 3, 26 and 28 October 2016 also stated “Please contact tenant for access.”
238.The Respondent submitted that the Original Tribunal was correct in determining that a tenant is not entitled to be compensated in these circumstances. The Respondent did not breach Standard Term 54(1). The Appellant was not asked to take time off work. That was her choice. Keys can be used to access the subject premises for the purpose of repairs. According to the Respondent, accessing properties with the use of office keys is common practice for rental properties. Tradespeople regularly collect keys and offer that option to tenants when booking work. If a tenant wishes to be present to provide access, tradespeople do their best to work with tenant’s availability. The agents do not normally meet tradespeople at properties to provide access. In this case, the offer from a Property Manager to meet tradespeople was extended to the Appellant only due to the level of maintenance visits that had been completed.
239.The Original Tribunal’s conclusion that the inconvenience relied upon by the Appellant did not arise from the Respondent’s breach of the tenancy agreement depends upon which breaches are being referred to. If the attendance of tradesperson is to remedy defects that were the lessor’s responsibility, then a breach of quiet enjoyment has occurred. The Original Tribunal did not specify which of the breaches fall within this finding.
240.If the tradesperson’s attendance is to remedy a defect that has arisen during the tenancy in accordance with Standard Terms 57 or 59 then the Appeal Tribunal agrees with the Original Tribunal. However, if the tradesperson’s attendance is to remedy a defect that amounts to a breach on the part of lessor, then the Appeal Tribunal does not agree that the above is a correct statement of the law.
241.A lessor may send a tradesperson to the premises to remedy a defect that existed from the start of the tenancy (that is, a breach of Standard Term 54), or to remedy a defect that the lessor caused to the premises during the course of the tenancy. In such cases a breach of quiet enjoyment may have occurred.[145]
[145] Worrall v Commissioner for Housing of ACT [2002] FCAFC 127. See Anforth et al at [2.13.17], [2.50.2]
242.The Original Tribunal stated that inconvenience to the Appellant in taking time off work to attend the premises during tradesmen’s access cannot be a breach of Standard Term 52.
In any event, the applicant elected to be present at her premises when tradespersons were attending, but did not need to be. The respondent’s agent had keys to the premises, and had confidence in the tradespersons’ honesty and competence.[146]
[146] Faulder v Tran [2018] ACAT 2 at [70]
243.Again this cannot be correct in the generality in which it is put. If the tenant’s attendance is caused by lessor’s breach then the issue becomes one of the degree of the inconvenience caused to the tenant. The fact that the lessor’s agent had keys and trusted the tradesperson is not the answer. It is the tenant’s home and they have the right to say who comes into the premises. The fact that the lessor might trust the tradesperson does not mean the tenants must also trust them (although they might be willing to do so). There might be other reasons why the tenant wishes to be present when the tradesmen are in attendance.
244.In the present case the Appellant had three cats that only lived indoors and were never allowed out. The Appellant was entitled to be concerned about the diligence of the tradespersons in preserving the security of the cats. The Appellant would have been entitled to be concerned about such things as possible theft or the tradesperson making a mess, matters which might not arise if she were present while the tradesperson were there.
245.That said, the Appellant’s reason for wanting to preserve her privacy were irrelevant. It was a right she had under the tenancy agreement that could not be lightly set aside by asserting that her privacy wishes were not ‘reasonable’. Tenants contract for the quiet enjoyment of the premises and emotional factors are relevant to that extent in assessing the level of compensation payable.[147]
[147] Watson v Gaudion [2009] ACAT 15 at [31].
246.The reasoning in support of making an award of compensation to the Appellant is supplemented by judicial analysis of section 71(1)(c) of the RT Act (quoted earlier at [57]) the language of which is adopted in Standard Term 52.
247.Under section 71(1)(c) of the RT Act, the Tribunal shall order a reduction in rent payable under a residential tenancy agreement if it considers that a tenant’s “use or enjoyment of the premises has diminished significantly as a result of” interference with the tenant’s quiet enjoyment of the premises or the tenant’s ability to use the premises in reasonable peace, comfort and privacy by the lessor or any person claiming through the lessor or having an interest in, or title to, the premises. That section uses the language also adopted in Standard Term 52.
248.The scope of that section was considered by a Full Federal Court in Worrall v Commissioner for Housing for the Australian Capital Territory[148]. In a joint judgment, their Honours wrote (citations omitted):
(a)acts omitted or authorised by or on behalf of the lessor may derogate from the grant even if the acts or omissions affect the quiet enjoyment of the premises only indirectly;[149]
(b)whilst interference with the normal use of premises arising from failure to repair will breach the covenant of quiet enjoyment, it is no answer to a complaint of breach of the covenant that it was a result of work required by statutory or other lawful authority;[150]
(c)the conduct of a lessor’s contractors, though both lawful and in pursuance of its obligation to repair and necessary to prevent what otherwise would have been a breach of its obligations to maintain a tenant’s quiet enjoyment of the premises, could amount to a breach of the covenant.[151]
[148] Worrall v Commissioner for Housing for the Australian Capital Territory [2002] FCAFC 127
[149] Worrall v Commissioner for Housing for the Australian Capital Territory [2002] FCAFC 127 at [74]
[150] Worrall v Commissioner for Housing for the Australian Capital Territory [2002] FCAFC 127 at [75]
[151] Worrall v Commissioner for Housing for the Australian Capital Territory [2002] FCAFC 127 at [68], [76]
249.On the facts of this case, the Appeal Tribunal is satisfied that a small separate award of compensation for general inconvenience is appropriate, particularly given that:
(a)the Appellant had to follow up the Respondent about some repairs that should have been done before the tenancy commenced (that is, breaches of Standard Term 54); and
(b)took time off work to be present when tradespersons attended the subject premises in relation to those repairs (both because the tradespersons were directed to contact the Appellant to arrange access and because it was appropriate, given her personal circumstances, for the Appellant to be present on those occasions).
250.Adopting the cumulative approach outlined earlier (see [65] to [67]), the Appellant should be awarded $200.00 for general inconvenience.
Filing fee
251.This appeal raises two questions about filing fees paid by the Appellant in relation to the proceedings before the Original Tribunal and the appeal proceedings.
252.The Original Tribunal determined that the Appellant was not entitled to be awarded the application filing fee.[152]
[152] Faulder v Tran [2018] ACAT 2 at [73]
253.On appeal, the Appellant referred to the Tribunal’s power to order a respondent to pay a successful applicant’s filing fee[153] and submitted that, although the amount of compensation awarded by the Original Tribunal was low, she would not have received any compensation had she not made the application to the Tribunal. Having paid a fee of $150.00 for a claim between $2001.00 and $10,000.00, but given the amount awarded, the Appellant submitted that it would be a reasonable to award the filing fee commensurate with the amount awarded, that is, $72.00.
[153] ACT Civil and Administrative Tribunal Act 2008 section 48
254.The Respondent submitted that a filing fee should not be awarded.
255.Given that the result on appeal is an award of $1,082.50, the Appeal Tribunal concludes that the Appellant should be reimbursed part of her filing fee for the original application in the sum of $72.00
256.The next issue is whether the Appellant should be reimbursed for the $538.00 expended on the appeal application fee. The Appellant has succeeded in part in the appeals against the Original Tribunal’s decisions in relation to the items for which compensation should be awarded and the amounts of compensation to be awarded. The amounts awarded by the Appeal Tribunal on appeal are not substantial, in monetary terms or as a proportion of the $4,668.00 claimed by the Appellant in her application to appeal. However, they are substantial as a proportion of the amount awarded by the Original Tribunal. But for this appeal, the Appellant would not have recovered the additional sums.
257.The Appellant is entitled to recover all of the filing fee for the appeal of $538.00.
Conclusion and Orders
258.For the reasons set out above, the appeal is upheld in relation to some of the conclusions of the Original Tribunal as to items for which compensation should be awarded or the amounts of compensation to be awarded.
259.Consequently, the Appeal Tribunal orders that:
1.The appeal be allowed in part.
2.The orders of the Tribunal dated 9 January 2018 be set aside.
3.Within 28 days from the date of this order, the Respondent pay the Appellant $1,692.50 comprised of:
(a) cleaning $175.00 (b) broken blind $61.50 (c) alarm system $168.00 (d) security key $70.00 (e) ducted vacuum system $40.00 (f) heating system $368.00 (g) general inconvenience $200.00 (h) original filing fee $72.00 (i) appeal filing fee $538.00
……………………………..
President G Neate AM
For and on behalf of the Tribunal
HEARING DETAILS
FILE NUMBER:
AA 6/2018
PARTIES, APPLICANT:
Charlie Faulder
PARTIES, RESPONDENT:
Vincent Tran
COUNSEL APPEARING, APPLICANT
N/A
COUNSEL APPEARING, RESPONDENT
N/A
SOLICITORS FOR APPLICANT
N/A
SOLICITORS FOR RESPONDENT
N/A
TRIBUNAL MEMBERS:
President G Neate AM,
Senior Member A Anforth
DATES OF HEARING:
27 April 2018
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