Flint v King (Residential Tenancies)
[2020] ACAT 51
•8 July 2020
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
FLINT v KING (Residential Tenancies) [2020] ACAT 51
RT 322/2019
Catchwords: RESIDENTIAL TENANCIES – effect of notice issued pursuant to section 64 of Residential Tenancies Act 1997 on lessor’s entitlement to rent and obligation to repair – whether section 71 or section 83(d) of Residential Tenancies Act is appropriate basis for compensation after tenancy ended
Legislation cited: Residential Tenancies Act 1997 ss 64 standard terms 57, 59, 60
Cases cited:Salem & Gizgeez and Abeygunasekara & Jeevanthan [2011] ACAT 9
Faulder v Tran [2018] ACAT 80
Tribunal: Senior Member E Ferguson
Date of Orders: 8 July 2020
Date of Reasons for Decision: 8 July 2020
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL RT 322/2019
BETWEEN:
DENISE FLINT
Applicant
AND:
JOHN KING
Respondent
TRIBUNAL: Senior Member E Ferguson
DATE:8 July 2020
ORDER
The Tribunal orders that:
Mr King is to pay to Ms Flint, if he has not already done so, the sum of $40 for the cost of the coffee plunger.
Ms Flint is to pay to Mr King the sum of $2,628.60 comprised of:
(a)$1,928.60 being refund of rent paid in error for period 26 January 2019 to 14 February 2019 inclusive i.e. 20 days at $96.43 per day;
(b)$700 being compensation for Ms Flint’s breach of obligation to repair tiles in ensuite bathroom.
The amount payable by Mr King at Order 1, unless already paid, is to be offset against the amount payable by Ms Flint at Order 2 and Ms Flint is to pay the balance to Mr King by 5pm on 5 August 2020.
………………………………..
Senior Member E Ferguson
REASONS FOR DECISION
On 22 December 2015 a tenancy commenced between Ms Flint as lessor and Mr King as tenant for a fully furnished apartment at Kingston (the property). Ms Flint has claimed unpaid rent from Mr King as a well as compensation for items he allegedly removed or broke during the tenancy. Mr King counterclaimed for refund of rent paid in error to Ms Flint and compensation for breach of her obligation to repair under the agreement. What distinguished this case from most residential tenancy disputes is the involvement of the lessor’s mortgagee. The facts are briefly as follows.
Ms Flint was in default of a loan from the Bank of Queensland (the bank) secured against the property. On 8 July 2013 the Supreme Court of the ACT issued a judgment in favour of the Bank of Queensland for possession of the property. After the court handed down the judgment several years passed during which the bank deferred enforcement and gave Ms Flint an opportunity to sell the property herself and discharge the loan. It was not until late 2018, Ms Flint having failed to sell the property, that the bank took the next step to recover possession of the property.
The bank’s solicitors, Dentons, sent three letters to the occupiers of the property dated 12 October 2018, 19 December 2018 and 25 January 2019 asking them to vacate. The third gave Mr King and his partner Ms Wagner, who shared the property with Mr King but was not a tenant, notice to vacate by 29 March pursuant to section 64 of the Residential Tenancies Act 1997 (RTA). At Mr King’s request the bank extended the deadline to vacate to 8 April 2019.
Mr King and Ms Wagner vacated the property on 8 April 2019, having paid Ms Flint’s rent up to and including 14 February 2019. Ms Flint claims rent of $5,273 for the period from 15 February 2019 until Mr King vacated the premises on 8 April 2019.
Ms Flint argued that as the registered owner she remained the lessor until Mr King vacated the property and was entitled to rent up to and including that date. She further argued that the bank was not entitled to rental payments unless, and until they had physical possession of the property.
Mr King argued that Ms Flint ceased being the lessor immediately upon the bank giving him notice to vacate pursuant to section 64 of the RTA, at which point any liability he had to pay rent was to the bank and not to Ms Flint. He counter claimed for rent he paid to Ms Flint after the tenancy ended. He left it to the Tribunal to determine which of the notices sent on behalf of the bank ended his tenancy with Ms Flint.
It was not seriously disputed that at all relevant times Ms Flint owned the property, Mr King occupied it, and the bank was entitled to possession. The central question was whether the bank was substituted for Ms Flint as lessor before Mr King vacated the property, and if so when. The date the tenancy between Ms Flint and Mr King ended was critical to both the claim and the counter claim.
Summary of decision
I found the tenancy between the parties ended on 25 January 2019 after which:
(a)Mr King was not required to pay Ms Flint rent for occupying the property after; and
(b)Ms Flint was relieved of any ongoing obligation to repair the property.
However, the end of the tenancy relationship did not affect the parties’ liability for breaches of the terms of the tenancy which they may have committed during its currency.
I ordered Ms Flint to refund Mr King sum of $1,928.60 for rent he paid her in error for the period from 26 January 2019 to 14 February 2019.
Ms Flint also claimed compensation of $40 for a coffee plunger, which she alleged was damaged and $50 for a bed valance which she alleged was a removed during the course of the tenancy. Mr King agreed to pay the $40 claimed for the coffee plunger but denied that Ms Flint supplied the valance.
I found that Ms Flint had failed to substantiate her claim in relation to the valance and ordered that Mr King pay Ms Flint within 28 days, if he had not already done so, the sum of $40 for the coffee plunger.
Mr King counter claimed for compensation for Ms Flint’s failure to repair the oven, the air conditioning and tiles in the ensuite bathroom in breach of her obligations under the tenancy agreement.
I found Ms Flint was in breach of her obligation to repair the oven and the tiles and ordered her to pay Mr King compensation in the sum of $700 for the loss he suffered as a result of Ms Flint’s failure to repair the tiles. I found she was not in breach of her obligation to repair the air conditioning.
In my view the duration and extent of inconvenience suffered by Mr King before the tenancy ended as a result of the oven not working was not sufficient to warrant compensation.
The reasons for my decision are set out in full below.
The claim- unpaid rent
The bank was entitled to possession of the property by virtue of the default judgment of the Court made on 8 July 2013 in favour of the bank, as plaintiff, against Ms Flint as defendant.[1] The judgment relevantly stated:
1.The plaintiff –
(a) recover possession of the land described in the Originating claim, (the property is fully described), as against the defendant.
[1] In the matter of No SC 425 of 2012 Bank of Queensland Limited (Plaintiff) Denise Charlene Flint (Defendant)
The Court did not make an enforcement order (referred to by Ms Flint as a Writ of Possession) at the time and the bank took no further steps to recover possession until the end of 2018. As there was a tenant in possession the bank used the mechanism established by section 64 of the RTA to terminate the tenancy between Ms Flint and Mr King. As the effect of section 64 is in dispute, I have set it out in full below:
64 Successor in title to lessor
(1) A person other than a lessor who, apart from section 36, would be entitled to possession of premises, may terminate the residential tenancy agreement relating to the premises by—
(a)notifying the tenant as soon as practicable after becoming so entitled that the person would be entitled to possession apart from section 36 and that the person who was lessor is no longer lessor; and
(b)giving the tenant not less than 8 weeks notice to vacate the premise section
Examples
1.The lessor dies and the premises are inherited by the lessor’s child. The child may terminate the tenancy.
2.The lessor mortgages the premises, defaults on the mortgage and the mortgagee forecloses. The mortgagee may terminate the tenancy.
Note If a form is approved under s 133 (Approved forms—Minister) for a notice, the form must be used.
(2) A person cannot terminate a tenancy under subsection (1) if the person—
(a) is a purchaser of the premises; and
(b)knew about the tenancy or could reasonably be expected to have known about the tenancy, before purchasing the premise section
(3) If a person has given notices under subsection (1), the relevant residential tenancy agreement terminates at the end of the period of 8 weeks after the date of the notice mentioned in subsection (1) (b) or on the later date specified in the notice.
Was a valid notice pursuant to section 64(1) issued?
The bank sent three notices to the property, all of which were in evidence. Mr King gave evidence that he only received the second and third notices dated 19 December 2018 and 25 January 2019 respectively, and I have no reason to doubt him.
There is no approved form for a section 64 notice, it need only contain the information prescribed by subsection (1) to be valid. I determined that the only effective notice was that dated 25 January 2019 because it met all requirements set out in section 64(1), and the other two did not.
The notice informed Mr King that:
(a)the notice was issued pursuant to section 64 of the RTA;
(b)the bank was entitled to possession by virtue of the order for possession attached to it;
(c)the mortgagor, Ms Flint, is no longer the lessor of the property;
(d)the tenant had until 29 March to vacate (subsection 2), being a date not less than eight weeks from the date of the notice. As previously noted, the bank later extended this date to 8 April 2019.
Ms Flint and Mr King disagreed about when the termination of the tenancy took effect under section 64. At the heart of the disagreement was the interpretation of subsection (3).
Section 64(3), states that the “relevant tenancy agreement terminates at the end of the period of 8 weeks after the date of the notice mentioned in subsection (1)(b) or on the later date specified in the notice.”
Was the relevant tenancy referred to in subsection (3) the original tenancy agreement with Ms Flint as lessor? Or was it the tenancy agreement with the bank substituted as lessor? If the former interpretation is adopted then Ms Flint remained entitled to rent until the date to vacate specified in the notice; if the latter is adopted then Ms Flint’s entitlement to rent ended upon the notice being given and the bank became entitled to rent until Mr King vacated.
Ms Flint argued that the notice did not immediately terminate her tenancy relationship with Mr King, which she said, only ended upon him vacating the premise. At the hearing she advanced an alternative argument that even if she was not entitled to rent as the lessor for the period after the notice was given she was entitled to be compensated as an owner of the property for Mr King’s occupation and use of it.
Mr King argued that his tenancy with Ms Flint ended immediately upon the notice pursuant to subsection (1) being given and continued with the bank as lessor.
Although read in isolation subsection (3) is somewhat ambiguous, when read in the context of subsection (1) its intended meaning becomes clear. The existing tenancy ends immediately upon a valid notice being given to the tenant. I reached that conclusion for the following reasons:
(a)Subsection 1 provides that the existing residential tenancy agreement is terminated by the giving of prescribed notice. The subsequent effluxion of time is not necessary to complete the termination.
(b)The required notice must state that the person who was the lessor is no longer the lessor.
The purpose of the notice period is not to prolong the rental income of the original lessor; it is there to protect the tenant by mitigating the effects of them being evicted through no fault of their own.
For the reasons set out above I concluded that the bank stepped into Ms Flint’s shoes as lessor on 25 January 2019 after which date Ms Flint was no longer entitled to rent payments from Mr King. Ms Flint failed to establish any other entitlement to payment from Mr King after that date. Accordingly, I dismissed Ms Flint’s claim for unpaid rent and ordered her to pay Mr King $1,928.60 being the amount of rent he paid in error for the period from 26 January 2019 to 14 February 2019.
The claim for damage to the valance and the coffee plunger
Ms Flint provided no objective evidence that the valance she claimed Mr King removed was there at commencement of tenancy. Mr King on the other hand provided a receipt of purchase in support of his assertion that he bought the valance himself. As Ms Flint failed to establish her claim for the valance, I dismissed it.
Mr King agreed to pay Ms King the amount of $40 she claimed in relation to a broken coffee plunger. If he has not already done so Mr King is to pay Ms King the sum of $40 for this item.
Counter claim
Having already dealt with Mr King’s claim for a refund of rent I will now turn to the other aspect of his counter claim being for compensation in relation to Ms Flint failure to comply with her obligation under the tenancy agreement to repair the oven, the air conditioning, and the tiles in the ensuite bathroom.
Clauses 57, 59 and 60 of the standard residential tenancy terms set out the lessor’s obligation to repair. Clause 57 provides that a lessor must make repairs (other than urgent repairs) within four weeks of being notified of the need for the repairs by the tenants. Clause 59 provides that the lessor carries out urgent repairs “as soon as necessary” having regard to the nature of the problem. Clause 60 lists a number of repairs in relation to the premises, or services or fixtures supplied by the lessor, which are deemed urgent.
Mr King claimed a retrospective rent reduction pursuant to section 71 of the RTA in relation to Ms Flint’s breach of her obligations under the tenancy agreement to repair. He sought a specific weekly reduction in relation to each item requiring repair.
The Tribunal’s usual approach to compensating a tenant for a lessor’s breach is that a claim for rent reduction under section 71 is appropriate when the tenancy is still in existence whereas a lump sum payment under section 83(d) is appropriate where the tenancy has terminated.[2]
[2] Then General President Crebbin Salem & Gizgeez and Abeygunasekara & Jeevanthan [2011] ACAT 9 at paragraph 8
However, as observed by President Neate in Faulder v Tran:[3]
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.
[3] [2018] ACAT 80 at paragraph 59
In this case I followed the Tribunal’s usual practice and considered the claim for compensation as one for a lump sum payment pursuant to section 83(d). Section 83 provides a non-exclusive list of orders which the Tribunal may make in relation to a tenancy dispute, including at subsection (d):
(d) an order requiring the payment of compensation for loss of rent or any other loss caused by the breach of a residential tenancy agreement or occupancy agreement.
The oven
Email correspondence in evidence established that Mr King notified Ms Flint that the oven was not working on 5 December 2018, as Mr King and Ms Wagner were going away over the Christmas period he wrote, “We could let someone in to look at it after we return”. An exchange of emails ensued about the model number of the oven.
On 7 January 2019, after Mr King returned, he emailed Ms Flint and said that they would like the oven fixed. He reminded her again on 22 January 2019. Ms Flint did not fix the oven before Mr King vacated.
At the hearing Ms Flint argued that Mr King and Ms Wagner were not inconvenienced by the faulty oven as there was another one in the kitchen which they could use. Mr King did not dispute that there was another oven in the kitchen and Ms Wagner gave evidence that the other oven was not suitable for roasting vegetables, something she did frequently.
The types of repairs classified as urgent by Clause 60(j) include:
(j) a failure or breakdown of any service on the premises essential for hot water, cooking, heating or laundering.
Mr King did not argue that the oven required urgent repair, and I do not think that it was essential given the existence of other means of cooking and the fact that Mr King expressed a wish to have it attended to after he and Ms Wagner returned.
As a non urgent repair, Ms Flint was obliged under clause 57 of the standard residential tenancy terms to repair it within four weeks of being notified of the need for the repairs (unless otherwise agreed).
It was clear from the correspondence that Mr King did not expect the oven to be repaired until after he returned. In my view Ms Flint was not obliged to repair the oven before she received Mr King’s email of 7 January 2019. However, this should not be regarded as the restarting the four week period for repairs stipulated in clause 57.
Having been alerted to the need for the repair in early December, Ms Flint should have been in a position to attend to repairs quickly, and certainly within a week of Mr King’s request of 7 January 2019. Her failure to do so constitutes a breach of her obligation under clause 57.
As previously found, the tenancy ended on 25 January 2019, at which point Ms Flint’s obligation to repair ended. She is only liable to compensate Mr King for any loss he suffered as a result of her failure to repair the oven for the period from say 14 January to the end of the tenancy on 25 January 2019.
I accept that the cooking arrangements were less than ideal during the last 11 days of the tenancy. This seems to be an issue more keenly felt by Ms Wagner, who not being a tenant cannot be compensated in these proceedings.
I found the loss of amenity suffered by Mr King during this period to be negligible given its duration and the presence of alternative cooking facilities and insufficient to warrant an award of compensation.
Air conditioner
Mr King first raised the air conditioner with Ms Flint in his email to Ms Flint on 7 January 2019 in which he said, “Also, the air conditioner does not seem to be blowing cool air. Could you please arrange for someone to have a look at it”?
On Tuesday 22 January 2019 he wrote:
I note also that the temperature forecasts for Saturday is currently 39 degrees and it is going to be quite hot in the days before that. The air conditioner in the unit is not cooling and I expect the unit will be uncomfortably hot by Saturday, so let us know what time you want to open (for an open house inspection) and we can let you in 30 mins beforehand.
Material from the Bureau of Meteorology website put in evidence by Mr King supported his assertion that the week referred to was indeed very hot.
Ms Flint did not repair the air conditioner, nor did she send a technician to assess it before Mr King vacated.
Although the lack of an air conditioning in the height of summer is likely to cause a tenant discomfort, it is not an urgent repair and so Ms Flint had four weeks from Mr King’s email of 7 January 2019 to have it rectified. Within that four week period the tenancy ended and with it her obligation to repair. Accordingly, I did not allow Mr King’s claim on this ground.
Ensuite tiles
It was not disputed that:
(a)four tiles fell off the wall in the ensuite bathroom;
(b)Mr King notified Ms Flint of the damage; and
(c)Ms Flint failed to repair the damage before Mr King vacated the property.
I accepted Mr King’s evidence that on 16 July 2018 he notified Ms Flint of the damage by sending her a photograph of the affected area.
I have no difficulty in finding that Ms Flint was in breach of her obligation to repair the tiles within four weeks of being notified of the damage. She did not suggest that the damage was the responsibility of the tenant. The question is what, if any, compensation is Mr King entitled to.
President Neate in Faulder v Tran summed up the matters to be considered in determining compensation as follows:[4]
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 case section
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.
[4] Faulder v Tran [2018] ACAT 80 at paragraphs 70-71
Ms Flint told the Tribunal that she did not repair the damage because comparable thickness tiles were no longer available. In my view there were other obvious ways to rectify the damage but, in any case, a lessor’s obligation to repair is strict and is not affected by difficulty complying.
When I asked Ms Flint why she did not retile the entire wall she said that due to the position of the tiles, “pretty well behind a curtain,” the damage was not particularly noticeable.
Mr King disagreed and said that the damage could be clearly seen from the bedroom. The tiles were described as being “about 200 across the top” by Ms Flint and about 50cm x 50cm by Ms Wagner in her witness statement at paragraph 10. The photograph in evidence showed a large area of exposed wall in the shower cubicle adjacent to the shower curtain with broken tiles on the floor below. The damage was in my opinion clearly visible and unsightly unless deliberate efforts were taken to conceal it.
Ms Flint in her statement of fact[5] described the apartment as “a large luxury apartment”. Mr King says that they paid a premium for the apartment, partly because of its luxurious quality. There was no reliable evidence before me as to whether the rent indicated that the apartment was in the luxury category, but I was satisfied that both parties considered it to be.
[5] Filed 23 August 2019
Mr King described the impact of the fallen tiles and Ms Flint’s failure over several months to repair:
MR KING: Well, I was worried that other tiles would fall off and so we kept a bit of an eye on them and tapped around it now and again just to make sure that they were going to stay on. It didn't affect me showering, but - and I think I said to Denise at one stage it wasn't an urgent repair because it wasn't near where water would get into it. But I thought for a luxury unit, you know, things had gone downhill, unfortunately.[6]
[6] Transcript of proceedings 7 February 2020 page 63
Notwithstanding that Mr King suffered no economic loss or loss of function as a result of the missing tiles I decided it was appropriate to award him the sum of $700 to compensate him for his safety concerns that further tiles may fall; and the diminution in the condition of the property, below what he could reasonably expect given its character as luxury unit. I took into account that Mr King had suffered this loss for several months between first notifying Ms Flint of the damage and her responsibility to repair as lessor ending.
………………………………..
Senior Member E Ferguson
HEARING DETAILS
FILE NUMBER: | RT 322/2019 |
PARTIES, APPLICANT: | Denise Flint |
PARTIES, RESPONDENT: | John King |
COUNSEL APPEARING, APPLICANT | N/A |
COUNSEL APPEARING, RESPONDENT | N/A |
SOLICITORS FOR APPLICANT | N/A |
SOLICITORS FOR RESPONDENT | N/A |
TRIBUNAL MEMBERS: | Senior Member E Ferguson |
DATES OF HEARING: | 7 February 2020 |
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