Halcombe v Bobolas; Bobolas v Halcombe (Residential Tenancies)
[2025] ACAT 5
•30 January 2025
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
HALCOMBE v BOBOLAS; BOBOLAS v HALCOMBE (Residential Tenancies) [2025] ACAT 5
RT 296/2024
RT 584/2024
Catchwords: RESIDENTIAL TENANCIES – where tenant applied under provision in the Residential Tenancies Act 1997 relating to inducement to take up tenancy by a false and misleading statement – where tenant sought to have application considered under the Australian Consumer Law – where tenant’s amended application was beyond the tribunal’s jurisdiction – where tenant sought compensation for the state of the premises at the start of or during the tenancy – where lessor applied for discharge of the bond to recover unpaid rent and early departure under a fixed term lease – whether the lessor made or implied a false or misleading statement – where tenant failed to provide comment on the incoming condition report – absence of evidence regarding condition of premises – lessor’s claim against the bond – break-lease clause – unpaid rent – where lessor failed to claim against entitlements
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 6, 7, 9, 15, 16, 17, 18, 53
Agents Act 2003
Australian Consumer Law ss 18, 236, 237, 243
Competition and Consumer Act 2010 (Cth) s 139G, part XIAA, Sch 2
Fair Trading (Australian Consumer Law) Act 1992 s 11
Residential Tenancies Act 1997 ss 8, 11A, 11AB, 12, 29, 30, 30A, 31, 46, 51A, 76, 84, Sch 1, standard terms 52, 54, 55, 57, 59, Sch 2, s 2.1
Subordinate
Legislation cited: ACT Civil and Administrative Tribunal Procedures Rules 2024 r 36
Cases cited:Bartlett and Bartlett v Ramasamy [2016] ACAT 115
Bills v Trustees from Paul Sevier Practice Super [2016] ACAT 67
Kimberley NZI Finance Ltd v Torero Pty Ltd (1989) ATPR (Digest) 46-054
Re Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd [1988] FCA 40
W Scott Fell & Co. Ltd v Lloyd [1906] HCA 79
Weiss v Coles and Fitzpatrick [2010] ACAT 21
Texts/
Papers cited: Paterson et al, Principles of Contract Law (Thomson Reuters, 3rd ed, 2009)
Tribunal: Senior Member M Hyman
Date of Orders: 30 January 2025
Date of Reasons for Decision: 30 January 2025
Date of Publication: 6 February 2025
AUSTRALIAN CAPITAL TERRITORY ) RT 296/2024
CIVIL AND ADMINISTRATIVE TRIBUNAL )
BETWEEN:
THOMAS HALCOMBE
Applicant/Tenant
AND:
CONSTANTINE BOBOLAS
Respondent/LessorAUSTRALIAN CAPITAL TERRITORY ) RT 584/2024
CIVIL AND ADMINISTRATIVE TRIBUNAL )
BETWEEN:
CONSTANTINE BOBOLAS
Applicant/Lessor
AND:
THOMAS HALCOMBE
Respondent/Tenant
TRIBUNAL:Senior Member M Hyman
DATE:30 January 2025
ORDER
The Tribunal orders that:
The lessor is directed to pay $552.66 to the tenant, on or before two weeks from the date of this decision.
…………………………………
Senior Member M Hyman
REASONS FOR DECISION
Introduction
Mr Thomas Halcombe (the applicant in matter RT 296/2024) was the tenant at premises in Gungahlin (the premises), owned by Constantine Bobolas (the respondent in that matter), from 16 June 2023 until May 2024. On 14 March 2024, Mr Halcombe lodged an application with the ACT Civil and Administrative Tribunal (ACAT or the tribunal) under the Residential Tenancies Act 1997 (the RTA), seeking to end his tenancy and secure financial compensation for misleading and deceptive conduct, and also for premises not in an adequate state of repair. The matter came before the tribunal on 27 March 2024, and was adjourned to 3 June 2024 so that Mr Halcombe could seek the issue of subpoenas to obtain evidence for his case. Mr Halcombe lodged an amended application on 21 April 2024, seeking similar orders, but also seeking recognition of a breach of the misleading and deceptive conduct provisions in the Australian Consumer Law (ACL). By the time the June hearing took place, Mr Halcombe had vacated the premises.
On 1 July 2024, Mr Bobolas (the applicant in matter RT 584/2024) sought that the bond for the premises should be discharged to him, on the grounds that Mr Halcombe (the respondent in that matter) had vacated the premises during a fixed term, and that he as the lessor was entitled to arrears of rent, reletting costs; and also seeking to recover $150 for the call-out of a tradesman to attend to Mr Halcombe’s internet connection. It follows that each of the parties is an applicant in one of these matters, and a respondent in the other. The two matters were heard together. In these reasons, both parties are identified by name with Mr Halcombe also being identified as “the tenant” and Mr Bobolas as “the lessor”.
The hearing
As noted above, the matter first came before the tribunal on 27 March 2024, then again on 3 June, 16 July, 30 August and 25 September 2024. Most of the oral evidence was given on 30 August 2024. At all the hearings, Mr Halcombe was self-represented and appeared remotely. Mr Bobolas appeared at the hearings on 3 June and 16 July 2024 in person, and appeared remotely on 30 August; at all the heangs, he was represented by the managing agents for the property, MARQ Property (MARQ), with Jessica Middleton, Emma Coleman Manuel, Suzy Wells and Craig Chapman appearing at different hearings, sometimes in person, more often remotely, each under an Authority to Act from Mr Bobolas. Mr Halcombe gave evidence in his own cause; Mr Chapman gave evidence for the lessor and was cross-examined.
There is a substantial body of papers before the tribunal. Apart from the material filed by the parties in the two matters currently being decided, there are two earlier applications relating to the tenancy, and Mr Halcombe has asked that the papers filed in those matters also be taken into account. Those two matters are explained directly below.
On 2 August 2023, less than two months into the tenancy, Mr Bobolas filed an application seeking to end the tenancy under section 51A of the RTA. That section allows a lessor to apply to the ACAT seeking termination of a tenancy for behaviour by a tenant that is threatening, intimidating, harassing or abusive. The application (matter RT 761/2023) also included a claim for a fee of $150 for a technician from Canberra Communications to attend the premises and connect Mr Halcombe’s internet. It was heard in the tenant’s absence, adjourned to allow the lessor to file an amended application, and to send a revised letter to the tenant giving notice of the conduct that purportedly provided the grounds for the application under section 51A of the RTA. No revised letter was sent, no amended application was made, and the application was dismissed. Some material relevant to the later applications is attached to that original application or was otherwise filed in support of it.
On 7 November 2023, the lessor filed a second application under section 51A of the RTA (again seeking termination for threatening, intimidating, harassing or abusive behaviour). This application (matter RT 1072/2023) was heard on 6 December 2023, and again, it was heard in the tenant’s absence. The application sought to end the tenancy, sought access to the premises to make an inspection, and again made a claim for $150 for the callout fee for Canberra Communications. The application was supported by witness statements from Emma Cutts of Bright & Duggan — manager of the apartment complex for the owners’ corporation (dated 5 September 2023) — and Denis Berezovskiy, an employee of MARQ (dated 1 September 2023). The Tribunal, having heard from the lessor’s agents, denied the application to end the tenancy, but ordered that the tenant pay the $150 callout fee and made orders for the tenant to allow access to the lessor’s agents for a routine inspection of the premises (Mr Halcombe had earlier denied access when it was requested by the agents).
On 3 January 2024, Mr Halcombe filed an application for interim orders under section 53 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act), explaining his absence from the hearing on 6 December 2023 and asking that the orders made at that time be set aside. He contested the witness statements of Ms Cutts and Mr Berezovskiy and lodged a counterclaim (received by the tribunal on 19 January 2024) seeking compensation for rent paid, inconvenience, loss of income and other amounts — amounts coming in total to well above the tribunal’s jurisdictional limit of $25,000. The orders of 6 December 2023 were set aside, but when the matter was heard again on 1 March 2024, the application and counterclaim were dismissed, and in that dismissal the Tribunal noted that any claim for compensation of the kind put forward in the counterclaim would need to be lodged with the tribunal as a fresh application, and would need to be within jurisdiction.
Following the initial hearing of the present two matters on 27 March 2024, Mr Halcombe requested that subpoenas be issued to MARQ and Bright & Duggan. The subpoenas were served on MARQ and on Ms Cutts as the proper officer of Bright & Duggan , Emma Cutts, the manager of the apartment complex for the owners’ corporation, on 2 July 2024. MARQ returned papers under the subpoena on 9 July 2024; Bright & Duggan failed to respond to the subpoena. With some difficulty, Ms Cutts was brought before the tribunal, and eventually returned relevant papers. She objected to the disclosure of the material to the tenant, on the grounds that the material was intended for the proprietors of the units in the complex and not for their tenants. That objection was dismissed, with an explanation of the implied undertaking by the parties not to use the papers for ulterior purposes. On 27 August 2024, Mr Halcombe filed an application for interim orders under section 53 of the ACAT Act, seeking further pursuit of the subpoena to Bright & Duggan. Ms Cutts appeared again on 30 August 2024, and accepted, on being questioned, that there was further material covered by the subpoena that she had omitted to return. Ms Cutts returned the additional material later the same day, but after the hearing had been adjourned. That material was considered at the hearing on 25 September 2024.
The succession of applications, and the papers filed in each matter, means that many of the papers appear multiple times. Mr Halcombe has asked that all the papers in all four matters that have come before the tribunal be taken into account. Accordingly, I have identified the papers by the application that was made in each case: in RT 761/2023, with attachments (the lessor’s first section 51A application); in RT 1072/2023, with attachments (the lessor’s second section 51A application); the tenant’s counterclaim in RT 1072/2023 (the tenant’s counterclaim of 19 January); the tenant’s application and amended application in RT 296/2024 (the tenant’s application and amended application); and the lessor’s application in RT 584/2024 (the lessor’s bond application).
I have assigned exhibit numbers to the papers returned under subpoena: the record of the owners’ corporation annual general meeting of 30 November 2022 is Exhibit A1; a bundle of emails from Emma Cutts, of various dates, relating to the renovations, is Exhibit A2; the contract for the renovation works and associated material is Exhibit A3; the additional papers relating to the work on the garden beds is Exhibit A4; and the papers returned by MARQ have together been identified as Exhibit A5. These are all exhibits in Mr Halcombe’s application.
As these related matters have progressed through the tribunal, Mr Halcombe assembled evidence in support of the case he was putting at the time, in each matter filing a bundle of papers addressing the matters raised by each successive application. Each of these bundles has a good deal of material in common with the other, but each also contains some different material. On 11 September 2024, Mr Halcombe filed the most recent of these bundles, material best understood as a witness statement with attachments. Some of the narrative material in the witness statement is factual, although other parts are more in the nature of submissions. I have identified the document as “the tenant’s final witness statement, with attachments”. Of the 17 attachments, I have declined to admit three into evidence: two online comments about MARQ, and one attachment relating to the behaviour of a person who shares the same surname as the lessor but appears otherwise to have no connection to the present matters. The online comments were excluded because the evidence is hearsay, it cannot be tested before the tribunal (being anonymous), and it is out of context (in that the total number of online feedback messages and their tenor are unknown); the account of the behaviour of the person with the same name as the lessor is excluded because in the absence of some clear link to the present matter, it fails to meet the most basic test of relevance. One other attachment, a screenshot of a text message, dated 3 July 2023, was challenged by the lessor as a fabrication. I deal with that issue later in this decision.
The hearing process in the two matters was unusually complex and challenging. That has some implications for the way I have arrived at a decision. I deal with these complexities and their implications later in the decision.
The difficulties in obtaining the material under the subpoena issued to Bright & Duggan were ultimately overcome, but it reflects poorly on the company and on Ms Cutts as the company’s employee in a trusted position that Ms Cutts was, apparently, unaware of her responsibilities as the proper officer at the complex, and very resistant to complying with the Tribunal’s directions.
The issues
Although the matter was heard on a protracted timetable, the issues to be decided are reasonably constrained. They are:
(a)Whether the lessor made a false and misleading statement in the lead up to the tenant taking up the tenancy;
(b)If so, whether that statement induced the tenant to enter into the tenancy;
(c)If so, what remedy should be ordered;
(d)Whether the faults in the premises identified by the tenant were present at the start of the tenancy and represent a failure to provide the premises in the required condition;
(e)In the alternative, whether some or all of those faults arose during the tenancy but were not remedied by the lessor within the prescribed timeframe;
(f)If the answer to (d) and/or (e) above is “yes”, what compensation should be ordered;
(g)Whether the tenant owed rent when he vacated the premises;
(h)Whether the tenant incurred a break fee by leaving the premises during the fixed term;
(i)If so, the amount of that break fee;
(j)Whether the tenant is liable for the callout fee for Canberra Communications;
(k)Taking into account all of the above, what amounts each of the parties should be ordered to pay the other; and
(l)When the payments are set off against each other, what final payment should be ordered to dispose of both matters.
The legislative framework
The RTA is the legislation governing residential tenancies in the ACT. A residential tenancy agreement is taken to contain the standard terms set out in schedule 1 to the Act; for a fixed term agreement, the standard terms are as they stood on the day that the parties entered into the agreement.[1] When a tenancy begins, the lessor is required to provide a condition report to the tenants, who may comment on it or sign it without comment; if no comment is made the tenant is taken to have agreed with the report.[2] At the end of a tenancy, the lessor must carry out a final inspection, with the tenant, and must complete and sign a report based on that inspection.[3] A lessor can deduct certain costs from the bond at the end of a tenancy, including unpaid rent and cleaning and repair costs.[4]
[1] RTA s 8(1)(a)
[2] RTA s 29
[3] RTA s 30A
[4] RTA s 31
The ACAT may, on application by a tenant, terminate a tenancy if persuaded that the tenancy was induced by a false and misleading statement by the lessor.[5]
[5] RTA s 46
A tenancy agreement may include a term providing for a penalty to be incurred by a tenant who leaves a tenancy during the fixed term;[6] the wording for such a term is prescribed.[7] The amount of compensation paid to the lessor depends on how much of the term is to run, and how long it takes to find a new tenant, and it can also include an amount for advertising for a new tenant.
[6] RTA s 8(1)(c)
[7] RTA Sch 2, section 2.1
Schedule 1 to the RTA sets out over 100 standard terms that form the contract between lessor and tenant (barring some potential for amendment, not presently relevant). A lessor must not cause or permit interference with the reasonable peace, comfort and privacy of a tenant in use of the premises.[8] At the start of the tenancy, the lessor must provide the premises in a reasonable state of repair, cleanliness and security.[9] If some of the household equipment provided by the lessor breaks down or if the premises need repair during the tenancy, the tenant must advise the lessor,[10] who must undertake the necessary repairs within four weeks.[11] For urgent repairs, such as major floods or failures of essentials like the hot water system, the lessor must do the necessary repairs “as soon as necessary”.[12]
The evidence
[8] RTA standard term 52
[9] RTA standard term 54
[10] RTA standard term 55
[11] RTA standard term 57
[12] RTA standard term 59
A great deal of the evidence in these matters was contested, but some of the basic facts are clear. The premises in question consisted of an apartment in Gungahlin; MARQ was the managing agent, on the lessor’s behalf. Bright & Duggan were the managers of the strata title complex. Mr Halcombe took up a twelve-month fixed term tenancy on 16 June 2023. He paid the rent regularly and took care of the premises. The tenancy finished in May 2024 when Mr Halcombe left the premises. The lessor says the date on which the premises were vacated was 22 May 2024; Mr Halcombe did not contest that date.
Mr Halcombe gave the bulk of his oral evidence on 27 March and 30 August 2024. He said that he had moved in on 16 June 2023, after inspecting the premises. Remediation work on the apartment complex — work creating a great deal of noise, dust and other nuisance — had started within a week. His own employment was mixed, with some at an office elsewhere but also some at home, and for the latter he needed concentration and focus. He went overseas for about a fortnight in late July 2023, thinking that the remediation of the complex would be over by the time of his return, but that was not the case. In the garden beds, high pressure hoses were being used to blast or vacuum soil from the beds, supplied by a compressor and generator. Then the jackhammers started. The whole project went on for more than twelve months, so he was effectively living in a building site for a year. The noise started every morning, with the start time variously identified as 6:00am or 7:00am and continued until about 4:00pm, and there was also work on weekends. The major problems were the noise, dust, vibration and smell; he also had to cope with aggression from some of the workers.[13]
[13] Transcript of proceedings dated 27 March 2024, pages 3, 8 and 11; Transcript of proceedings dated 30 August 2024, pages 25–26
Mr Halcombe said that, because of the noise, dust and other annoyances arising from the renovations, he rang Worksafe and “the EPA”. They sent people out. He was told that the remediation was taking place under a permit. He had a conversation with Worksafe, who checked the project. He further said that MARQ was not helpful as he tried to cope with the problems at the premises. He tried to get agreement that he should be able to leave the tenancy without penalty, but instead they went to ACAT to try to evict him on the grounds that he had been abusive and threatening. This was without foundation — rather, it was he who was threatened by MARQ. The saga of the internet connection illustrates how the relationship failed to work. No-one at MARQ could say where the NBN box was to be found. His own internet service provider, TPG, offered to come and identify it. But MARQ insisted on bringing in Canberra Communications. He did not at any stage agree to Canberra Communications making a service visit, and he could not see why he should have to pay $150 for a service he did not agree to and saw no need for. At the time of the visit by Canberra Communications, he had been away from the premises, at work.[14]
[14] Transcript of proceedings dated 30 August 2024, pages 26–28
Mr Halcombe stated that the NBN connection had not been working when he moved in, and that the dryer and antenna had not been working either. A tradesman had come and had fixed the dryer, and had helped him solve the antenna problem through the use of a “rabbit-ears” antenna. The hot water system had also been a problem — it had not been working from the start of the tenancy and he had no hot water through the winter. There was a leak in the roof of the bedroom (as shown by a water stain); the drain in the kitchen was blocked; there was a piece of metal sticking out in the shower; the washing machine gave off a foul smell, and if he did try to use it, it damaged clothing, failed to wash properly and caused his things to smell; the intercom system for the unit did not work (it was replaced but the replacement did not work either); and there were bugs and spiders in the drainpipes, causing them to smell.[15]
[15] Transcript of proceedings dated 30 August 2024, pages 28–31
Eventually all of these problems became too much — especially the effect of the remediation works — and in late May 2024 Mr Halcombe said he decided to leave the premises; at that point he stopped paying rent.[16]
[16] Transcript of proceedings dated 30 August 2024, pages 31–32
Mr Halcombe said that at an inspection Mr Bobolas, the lessor, assaulted him, leaving him shaken and fearful. Indeed, he said that the entire experience of renting the premises had caused him mental problems from which he was still trying to recover.[17]
[17] Transcript of proceedings dated 30 August 2024, page 32
Mr Chapman of MARQ gave evidence that his agency managed several apartments in the complex, without complaints about the noise and disruption from the other tenants. Mr Halcombe had inspected the property before moving in, and he had been given an opportunity to leave the premises on 30 August 2023 (in the context of the lessor’s first section 51A application), but it had not been taken. Mr Halcombe in evidence had said he asked if he could move out early in the tenancy, but the agency had no record of that. He eventually did move out, without giving any notice, on or before 22 May 2024.[18]
[18] Transcript of proceedings dated 30 August 2024, page 38
As for the faults in the premises, no notice had been given of faults in the washing machine or dryer; the intercom fault had been reported to the strata title office. No complaint had been made about the hot water system, the bugs and spiders, or the smell. Regarding the NBN issue, Mr Halcombe had confirmed the Canberra Communications appointment and had been home at the time the technician arrived, but refused to come to the door.[19]
[19] Transcript of proceedings dated 30 August 2024, page 38
Under cross-examination, Mr Halcombe pressed the question of whether MARQ had a record of his attempt to bring the tenancy to an end in July 2023. Mr Chapman insisted that MARQ had no record of that and reiterated his position that the application to the ACAT on 30 August 2023 had provided an opportunity that Mr Halcombe had not taken up.[20]
Arguments of the parties
[20] Transcript of proceedings dated 30 August 2024, page 41
Mr Halcombe contended that before he took up the tenancy in the present matter, he had been living on a main road, where it was noisy much of the time. When seeking a new place to live, he wanted to find somewhere that was quiet, and that was why the premises suited him — “in a quiet street … in a quiet location”.[21] He was “pretty sure” the premises were advertised as quiet.[22] He inspected the premises, found them suitable, and took up the tenancy for a fixed term of one year. Immediately on moving in, he discovered that there was major work occurring, first in the nearby garden beds, which were leaking and needed to be redone in major ways, and then in major renovations to the entire complex. This work was extremely noisy, generated large amounts of dust and vibration, and continued for the entirety of the tenancy.
[21] Transcript of proceedings dated 30 August 2024, pages 55–56
[22] Transcript of proceedings dated 30 August 2024, page 56
Mr Halcombe said that the lessor and his agents had an obligation to inform him of the work that was to take place, as it went to the fitness of the premises for habitation. Silence on this point was misleading and deceptive; it was only because he expected the premises to be quiet that he entered into the tenancy, and he was therefore induced to do so by the false and misleading behaviour of the lessor’s agents. The conditions at the premises had caused him significant distress, through insomnia and general debility. He should not have had to pay rent for any of the time he lived at the premises; the failure of the lessor to supply the premises in a satisfactory condition and to maintain them to a reasonable standard was a further illustration of their mismanagement. There should be no deductions from the bond: the bond should be discharged to him in its entirety.
Mr Halcombe advanced a number of other arguments in very strong terms: that the Tribunal “needs to make an example of MARQ”; that their behaviour was “textbook misleading and deceptive conduct”; and the Tribunal “needs to crack down on this kind of behaviour”. Mr Halcombe’s engagement with the MARQ personnel who attended the hearings was frequently aggressive and there is no doubt that there are strong feelings of animosity between the agents and former tenant.
The argument from Mr Bobolas and his agents was that Mr Halcombe was a rude and aggressive tenant; that MARQ had managed the tenancy professionally and in accordance with industry practice; that the remediation works fell within the guidelines (for noise, dust and so forth) allowed for such projects, meaning that no special notice to tenants or prospective tenants was necessary; that any needed repairs or equipment faults at the premises had not been notified or if notified were appropriately remedied; that Mr Halcombe had agreed to the service call by Canberra Communications and was therefore liable for the callout fee of $150; and that Mr Halcombe’s departure without notice during the fixed term entitled the lessor to compensation for lost rent and other costs.
Consideration
Some preliminary issues
As noted earlier, the lessor brought two applications to this tribunal in August and November 2023 under section 51A of the RTA, seeking to terminate the tenancy because the tenant had been aggressive and intimidating. The first application was dismissed, the second heard in the tenant’s absence and largely dismissed. Section 51A of the RTA sets out a number of factors that are to be taken into account in arriving at a decision under that section, and the effect is to encourage the tribunal to grant a termination and possession order only where there is no reasonable alternative (although to do so is not set out as a last resort). In the circumstances of the second application, the issues raised by section 51A were considered and the order sought was not granted, despite the evidence of the property managers and associated parties and the absence of the tenant from the hearing. But the bringing of the applications themselves signals that relations between the parties were antagonistic, even early in the tenancy.
The hearings themselves were somewhat out of the ordinary. Every hearing began with consideration of one or more applications for interim orders made by the tenant under section 53 of the ACAT Act. Mr Halcombe lodged nine such applications during the hearing process. Applications of this kind are available to parties to ensure that procedural or collateral matters are attended to as they arise. Mr Halcombe was entirely within his rights in bringing these applications, but it is a little unusual for there to be so many. The applications are listed below, with relevant dates and the ruling made on each application (leaving to one side the application made in matter RT 1072/2023, which is referred to in paragraph [6] above).
Orders sought
Date of application
Date of ruling
Ruling
Urgent hearing
27/3/24
First available listing
Short service of subpoenas
29/5/24
3/6/24
Dismissed, as short service no longer needed
Tribunal member to recuse himself for bias, aggression, advocating on behalf of the other party and other reasons
12/7/24
16/7/24
Dismissed
RT 584/2024 not to be heard together with RT 296/2024, claim under ACL to be added
12/7/24
16/7/24
Dismissed; matters to be heard together; order made directing Mr Halcombe to file a separate application under the ACL if he sought orders to be made under that legislation.
Listing of Mr Halcombe on TICA database to be withdrawn
27/8/24
30/8/24
Granted; MARQ ordered to withdraw listing
MARQ and Bright & Duggan to comply with subpoena
27/8/24
30/8/24
Granted in respect of Bright & Duggan, MARQ having already complied
Bond to be redeposited with ACT Rental Bonds
27/8/24
30/8/24
Dismissed
Bright & Duggan to comply with subpoenas
3/9/24
25/9/24
Dismissed
Bond to be redeposited with ACT Rental Bonds
10/9/24
25/9/24
Dismissed
A lien be taken out on Mr Bobolas’s assets to ensure any orders can be enforced
10/9/24
25/9/24
Dismissed
Furthermore, because every hearing began with consideration of these applications and ruling on them, a good deal of hearing time was taken up, and Mr Halcombe occupied a dominant role at the start of each hearing, as he put his argument on the applications. When this is added to his very assertive tone and style, and his forceful putting of his views at every opportunity, the result was that Mr Halcombe was very much the dominant voice in the hearings, and Mr Bobolas and his agents played a low-key and even minimal role most of the time. They declined to cross-examine Mr Halcombe when he gave evidence, and their final submissions were brief and effectively devoid of substantive argument.
Section 7(b) of the ACAT Act requires the tribunal to observe procedural fairness and natural justice. Procedural fairness requires that parties be given an opportunity to be heard, to put before the tribunal the evidence that they believe will assist their case, and that the tribunal does not turn to evidence that they have not had an opportunity of challenging or otherwise commenting on. Those opportunities were given to both parties, but were seized more forcefully by one party, Mr Halcombe. And it is not as if Mr Bobolas and his agents were naïve and unpractised; Mr Chapman and his colleagues from MARQ are not, I think, legally trained, but they are professionally engaged as property managing agents, and it is reasonable to expect that they will bring the relevant expertise and skills to that role.
The hearing also ended in unusual circumstances. On 25 September 2024, there was a limited amount of additional evidence to be taken into account, consisting of the further material returned under subpoena by Ms Cutts, and the papers filed by Mr Halcombe on 11 September 2024. But Mr Halcombe wished to seek further evidence, in particular the various documents relating to obtaining formal approval for the renovations at the strata complex, and one of his applications for interim orders sought to pursue that material under the existing subpoenas. Ms Cutts, who appeared briefly at the hearing, denied any knowledge of additional documents of that kind. It appeared likely to me that such documents would exist, but would in all likelihood be held not by Bright & Duggan, the strata managers, but by Level 1 Projects, who undertook the renovations. Mr Halcombe then wished to issue further subpoenas to Level 1 Projects. I dismissed Mr Halcombe’s application for interim orders. Given that the hearing process had already extended over a long period, I did not see it as proportionate to extend it further unless clearly in the interests of justice to do so. And so far as I could see, the evidentiary value of any additional material, given the scope of Mr Halcombe’s case, would be to confirm that Mr Bobolas was aware before the tenancy was entered into, actually or constructively, that the renovations were to take place. In my view, the papers already returned under subpoena were adequate for that purpose, and no additional purpose would be served by further subpoenas of the kind that Mr Halcombe wished to seek. Accordingly, I asked the parties to proceed to final submissions.
Mr Halcombe, the applicant in matter RT 296/2024, spoke first. He continued speaking for an extended period. He was intolerant of any interruptions and made it plain that he intended to keep talking for an indefinite period. After an extended time, it became clear to me that Mr Halcombe had exhausted all his available arguments and had put before me all the matters that he could and was reduced to repeating the same arguments in marginally different terms. At that point, I muted Mr Halcombe’s telephone line (both parties were appearing remotely) and allowed Mr Bobolas’s agents to make submissions. Mr Chapman did so in about one minute, making little if any substantive argument. Mr Halcombe, once unmuted, started to make further submissions that he said were by way of rebuttal. But nothing said by Mr Chapman, in my view, raised a right of rebuttal in Mr Halcombe. At this point, the lessor’s agents were threatening to leave the hearing, and, being persuaded that there were no more arguments to hear, but unable to interrupt Mr Halcombe, I ended the telephone calls and the hearing.
Throughout the tenancy and the hearing of these matters, there has been animosity between the parties. That can be partly explained, perhaps, by the disruption to the tenancy, if Mr Halcombe’s evidence is accepted. But the papers include more than one complaint about Mr Halcombe personally, describing him as rude and aggressive. Mr Halcombe denies these claims, saying they are inaccurate and unfair, and depicting himself as on the receiving end of the aggression of others, even alleging an assault by Mr Bobolas at an inspection. In my view, he has a manner that can fairly be described as abrasive, and he is very assertive in speech. It would not surprise me that some people would find him rude. It is also fair to say that he was not a party whose participation in the hearing process was disciplined or easily managed. None of this, however, goes to his reliability as a witness or to the merits of his case. At times, I gained the impression that Mr Bobolas and the managing agents were so personally at odds with Mr Halcombe that they could not accept that there could be any merit in his case.
However, every party must be heard, including those who are difficult or whom the opposing party might find unpleasant. From looking at the papers in the current matters and the related applications that preceded them, I conclude that Mr Halcombe has maintained a consistent line throughout and has put forward essentially the same evidence throughout the process. Again, that does not say anything about the merits of his case; it might suggest a genuine sense on his part of having been wronged, but whether he can succeed in his application depends on the application he has made, the evidence he has been able to put on, and the application of the law to the circumstances so established.
Jurisdiction
Mr Halcombe’s applications to the tribunal — or some of those applications, at least — challenge the tribunal’s jurisdiction, that is, its capacity to hear and decide the dispute; and they do that in two ways. First, some versions of his application seek compensation or other payments well in excess of the tribunal’s jurisdictional limit of $25,000; second, Mr Halcombe made his application in RT 296/2024 under the RTA, but in his subsequent amended application (and consistently in oral argument) sought to convert that application into one under the ACL (or possibly to have the application considered under both the RTA and the ACL).
Mr Halcombe’s amended counterclaim of 21 February 2024 in matter RT 1072/2023 specified a detailed claim for compensation which he said arose because of the disruption caused by the renovations. That claim was for loss of quiet enjoyment ($23,005 rent plus $10,000 inconvenience); lost income ($106,666.70); the prospective cost of relocation to new premises ($1,800); the tribunal filing fee ($176); and an amount to be determined for pain and suffering. The total is vastly beyond the tribunal’s jurisdictional limit, which is set at $25,000 in section 76(2) of the RTA (the same limit is set for civil dispute applications by section 18 of the ACAT Act). When both Mr Bobolas’s application and Mr Halcombe’s counterclaim were dismissed on 1 March 2024, a note was added that Mr Halcombe would need to lodge a fresh application, within the tribunal’s jurisdiction, if he wished to pursue the matters raised in his counterclaim.
The application lodged by Mr Halcombe on 14 March 2024 in matter RT 296/2024 is presumably a response to that note. The application, made under the RTA, seeks termination of the tenancy, and compensation, comprising $25,000 in rental abatement and unspecified additional compensation for pain, suffering and inconvenience. On 21 April 2024, however, Mr Halcombe lodged an amended application which, although it remains an application under the RTA, repeats the earlier claim against the ACL, and once again, the claim exceeds the jurisdiction of the tribunal, seeking $25,000 in rent reduction, discharge of the entirety of the bond, funding of temporary accommodation while relocating, the filing fee for the application, legal and medical costs, compensation for damage to clothing from the washing machine, and compensation for “loss of utility”.
The tribunal’s jurisdictional limit for RTA and civil dispute applications, although for the same amount, are set in different ways: under section 76(2) of the RTA, the ACAT may not make an order for more than $25,000; under section 18 of the ACAT Act, the tribunal may not accept a civil dispute application for more than that amount. It follows that the attempt to claim under the ACL in Mr Halcombe’s amended application was beyond jurisdiction if regarded as a claim under the ACL, because the amount sought was inevitably beyond the jurisdictional limit, even if only by an implied rather than specified amount.
At the hearing on 3 June 2024, there was some discussion of this attempt to repeat the claim under the ACL, and the orders I made on that date include a direction that any claim against the ACL must be made under a separate application. This order was intended to deal with what I saw as an attempt to escape the jurisdictional limit imposed by section 18 of the ACAT Act.
At the centre of Mr Halcombe’s case — whether considered under the RTA or the ACL — is his assertion that he was induced to enter into the tenancy by “misleading and deceptive conduct” by the lessor or the lessor’s agents. Mr Halcombe made his original application under the RTA, which suggests that he was relying on section 46 of that Act, which provides that, on application by a tenant, the ACAT can terminate a tenancy if it was induced by a false or misleading statement of the lessor. The remedy for a tenancy induced by a false or misleading statement, then, is termination, and any resulting compensation is limited to a refund of rent flowing from termination.
There are several different areas of law where a person who claims to have been deceived, and to have suffered some loss or injury because of that deception, may seek redress. This may occur, for example, under the common law (including misrepresentation under the common law of contract, the tort of deceit, negligent misrepresentation) and under statute law (including the ACL, or, relevantly in present circumstances, the RTA). Each of these differs in the form of deception that allows the wronged party to take action, and in what kind of remedy might be available to a successful party. Generally speaking, action under the ACL has become the major avenue for most cases of this kind. Mr Halcombe was clearly advised that a claim for misleading and deceptive conduct under the ACL would require an application under that statute, and that the application would need to be within the tribunal’s jurisdiction. He chose not to lodge such an application.
Under the common law, a person may bring action against another on the basis that they have been led into a contract under a misrepresentation. To succeed, the representee must show that there was a representation, either actual or implied; that the representation was false or misleading in some material particular; and that the representee entered into the contract relying on the misrepresentation. In general, it is more difficult to establish a misrepresentation through an implied representation (misrepresentation by silence) than by a positive representation. The usual remedy for misrepresentation is rescission, i.e. setting the contract aside ab initio.[23]
[23] Paterson, Jeannie, Andrew Robertson and Arlen Duke, Principles of Contract Law, 3rd ed., 2009, Thomson Reuters, Chapter 32
The ACL is a body of Commonwealth, State and Territory statute law, covering among other things the supply of goods and services in trade or commerce to a consumer. The ACL arises from Commonwealth law, being Schedule 2 to the Competition and Consumer Act 2010 (Cth) (the Commonwealth Act). The Commonwealth Act applies the Australian Consumer Law (Schedule 2 and regulations made under section 139G of the Commonwealth Act) to corporations and some other entities, reflecting the Commonwealth’s constitutional powers. But the protection of consumers is a shared area of regulatory supervision among the Commonwealth, States and Territories, and Part XIAA of the Commonwealth Act provides for participating States and Territories to extend the Australian Consumer Law within their jurisdiction. In the ACT, section 11 of the Fair Trading (Australian Consumer Law) Act 1992 applies the Australian Consumer Law (to be called the Australian Consumer Law (ACT)) to: people carrying on business in the Territory; to bodies incorporated or registered in the Territory; and to persons resident in or otherwise associated with the Territory. In this decision, “the ACL” means the Australian Consumer Law (ACT).
Section 18(1) of the ACL provides that “[a] person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” The remedies that may be ordered are broad, including for damages,[24] and for a variety of forms of compensation, including declaring a contract void.[25]
[24] ACL s 236
[25] ACL ss 237, 243
Section 46 of the RTA reads as follows: “[o]n application by a tenant, the ACAT may terminate a residential tenancy agreement if satisfied that the agreement was induced by a false or misleading statement of the lessor.” In order to succeed, a tenant must apply to the tribunal, and then must satisfy the tribunal (a) that the lessor made a statement, (b) that the statement was false or misleading, and (c) that the statement induced the tenant to enter the tenancy. If the tenant succeeds in putting that case, the remedy that the tribunal may order is the termination of the tenancy. The section is a close reflection of the common law of misrepresentation, applied to the residential tenancy environment.
It is apparent that the scope of the conduct that gives rise to a cause of action is somewhat wider under the ACL than under the other avenues identified above; “misleading and deceptive conduct” is wider than “a false and misleading statement”, especially when what has deceived the consumer appears to be a silence on a critically important point or issue. The range of remedies available is similarly broader. Nevertheless, there is a very wide overlap between misleading and deceptive conduct, on the one hand, and a false and misleading statement, on the other, and the case law on misleading and deceptive conduct will frequently apply to action for a false and misleading statement.
Tribunals do not have powers at large; they are creatures of statute, and they have the powers given them under statute, arising in the circumstances set out in the various statutes conferring those powers. The ACAT Act provides that a person may apply to the ACAT if an authorising law provides for such an application.[26] A person may also apply under the civil dispute provisions in the ACAT Act:[27] section 16 provides that a civil dispute application is one or more of a number of different kinds of listed applications, and section 17 then provides that a person may make a civil dispute application. One of the kinds of civil dispute applications, at section 16(1)(i), is “an application for an order under the Australian Consumer Law (ACT)”.
[26] ACAT Act s 9
[27] ACAT Act ss 15-17
It follows that the ACAT has powers to make an order under the ACL only if a person applies for such an order. When I advised the tenant that he would need to apply under the ACL if he wished to obtain such an order, he suggested that this was nothing more than “a technicality”. But this point goes to the ACAT’s jurisdiction, and statutes conferring jurisdiction on a court or tribunal are construed strictly: a tribunal must satisfy itself that it has relevant powers to determine a mater before proceeding to do so. The ACAT Act encourages the tribunal to be flexible and to attempt to find ways to settle disputes that come before it: section 6 of the ACAT Act sets out the objects of that Act, including making the tribunal accessible and inexpensive for parties, and resolving disputes as quickly as is consistent with achieving justice. Section 7 calls on the tribunal to make its procedures simple, quick, inexpensive and informal. Neither of these sections, however, allows the tribunal to assume it has jurisdiction where it does not. Similarly, rule 36 of the ACT Civil and Administrative Procedures Rules 2024 allows the tribunal to move a matter from one area of the tribunal’s jurisdiction to another, on its own motion or on application by a party.
There are cases where this tribunal has considered the application of the ACL in the context of an application under the RTA. In Weiss v Coles and Fitzpatrick[28] (Weiss), tenants from overseas took up a tenancy on the basis of advertisements that stated that there was a large and private garden. The premises were in fact a dual occupancy with a shared garden and clothesline. The tenants argued their case on consumer law as well as on the RTA. The Tribunal noted the arguments and the case law quoted in support, and found that the advertisements had been false and misleading, sufficiently to enliven section 46 of the RTA. The tenancy agreement was terminated, and the lessor ordered to repay rental payments received. The entirety of the bond was discharged to the tenants.
[28] [2010] ACAT 21
In Bartlett and Bartlett v Ramasamy[29] (Bartlett), a tenant applied seeking compensation because the agents for the property had told him that he was not entitled to the inclusion of a posting clause in the tenancy agreement (a clause that allows a tenancy to be ended early because one of the parties has been “posted” to or away from Canberra) unless he was from the Defence forces. The Tribunal accepted that the lessor’s agents had made a false and misleading statement and terminated the tenancy agreement on the date it would have terminated if a posting clause had been included in the agreement. The Tribunal commented on the jurisdictional points raised above in the following terms:
The tenant did not articulate the particular cause of action that he relied upon. This is to be expected with unrepresented parties and is no criticism of the tenant. It is the Tribunal’s role to consider the substance of the case put by the parties and correlate that case with a cause of action known to law and to do so within the bounds of proportionality. If the Tribunal were to insist that unrepresented parties frame their case with the precision of a cause of action known to law, it would be tantamount to requiring the parties to retain lawyers to draft pleadings. This is not the modus operandi of the Tribunal and would not be consistent with its statutory mandate.
The agent’s misrepresentations are actionable under the Australian Consumer Law (ACL) and may sound in damages. The misrepresentations are also relevant to the exercise of the Tribunal’s powers under section 46 of the RTA …
[29] [2016] ACAT 115
There is only a small number of other reported cases where section 46 has been the basis of a tenant’s application. In Bills v Trustees from Paul Sevier Practice Super[30] (Bills), a tenant sought compensation under section 46 of the RTA because of noise at night from a “gastropub”. He contended that the level of noise was inconsistent with the advertisement of the premises as “quietly positioned”. The Tribunal found that the tenant had been misled but could not order the remedy provided for in the RTA (termination) because the tenancy had already ended.
[30] [2016] ACAT 67
The willingness of the tribunal to consider the application of the ACL in cases brought under the RTA in Weiss and Bartlett, and the comments quoted above in the second of those cases, seems potentially at odds with the position articulated earlier that the tribunal’s jurisdiction under the ACL is only enlivened by an application under section 17 of the ACAT Act seeking an order under the ACL. But the facts in both Weiss and Bartlett satisfied section 46 of the RTA, and the remedy then ordered was that provided for in the RTA. The member did not need to turn his mind to whether, in practice, an application made under the RTA could allow a case to be made out under the ACL that would have failed under the RTA, or whether the tribunal could make orders under the ACL that would have been unavailable under the RTA. And I note that in Bills, the Tribunal member did not seem to feel a need to consider whether a remedy from the ACL should be ordered when the remedy under the RTA was spent.
The real difficulty in accepting Mr Halcombe’s attempt to bring the matter under the ACL lay in his refusal to constrain his application to the tribunal’s jurisdiction; this is a matter to be managed at the time of the application in a civil dispute application; but at the time of making an order, under the RTA. Mr Halcombe was well aware of the operation of the ACL, and indeed of the expectation of the tribunal that he would apply under that statute if that was the cause of action he wished to press.
Did the lessor make a false and misleading statement?
It follows that the question to be answered in the present matter is that asked in the heading immediately above — whether or not the lessor made a false or misleading statement to the tenant. The broader question of whether the lessor engaged in misleading or deceptive conduct does not arise. It further follows that if he is to succeed, the tenant must be able to point to a statement by the lessor (an actual or an implied statement), and then demonstrate that that statement was false or misleading. In the present instance, Mr Halcombe is plainly asserting that the lessor promised quiet premises when the premises turned out to be anything but quiet; or, in the alternative, that the lessor was obliged to disclose that the premises were not going to be quiet, and by not doing so was impliedly promising quiet premises.
One thing that appears clear is that the lessor had actual or constructive knowledge, before the tenancy began, of the remediation work; certainly of that by Level 1 Projects and probably also of the smaller scale remediation work done on the garden beds. That much is plain from the material returned under subpoena. The Annual General Meeting minutes from successive years report on the planning of the work, the borrowing of significant sums to fund it, and the entry into a contract with Level 1 Projects.[31] Mr Bobolas, as a proprietor of premises within the complex, was sent those minutes, and, whether or not he read them, he is fixed with knowledge of the remediation works. The initial work on the garden beds, which started earlier and went for a shorter period, seems to have been managed through a smaller number of people outside Bright & Duggan; perhaps some nominees from the owners’ corporation. But the entire remediation project was a focus of attention for the corporation for an extended period and required an increase in strata title fees. On the balance of probabilities, all the proprietors at the complex were aware of it.
[31] Exhibits A1, A3, A4
If Mr Bobolas had a defence against that conclusion, it would be the absence of documentation that identifies him as a member of the owners’ corporation for the complex, and of his name from the lists of people to whom the various documents were sent by Bright & Duggan. I have not been able to identify evidence of that kind. But he has not come forward claiming ignorance, or denying his status as proprietor of the premises, and given the attention to this issue during the subpoena process, it seems highly likely that he would raise this defence if it were available to him. I think, therefore, that the only reasonable conclusion is that he was aware of the remediation, and that is a conclusion he has not denied; and the evidence establishes inescapably that MARQ was aware of the remediation before it began.[32]
[32] Exhibit A4
The additional material returned by Ms Cutts under subpoena provides information about the work done on the garden beds. It appears that the waterproofing problems of the complex extended to the garden beds, and a separate contract was to a company called Burhor for vacuum extraction of the soil and manual removal of trees and shrubs. The documentation shows that this was due to begin in the week after 1 June 2023, although the approvals given by those who appear to be representatives of the owners are dated 16 June 2023. An invoice dated 20 July 2023 estimated that 6–10 “truck onsite days” remained for completion of the project. The evidence, while less than completely clear about the start date, establishes that the work was being undertaken in June and July, as Mr Halcombe stated.[33]
[33] Exhibit A5
The challenge for Mr Halcombe is to establish that there was an actual or implied statement that the premises were quiet. This was not a focus of his evidence, which was dominated by his account of the impact of the renovations on his health and general well-being. When giving evidence, he said that he was “pretty sure” that the premises were advertised as quiet;[34] and he repeated this claim, with greater emphasis and apparent certainty, during final submissions.[35] He also said while giving evidence that when interacting with MARQ before taking up the tenancy, he made no special point of the importance of the premises being quiet, beyond noting that he was glad to be moving away from somewhere noisy;[36] but in final submissions, once again, he was far more definite and detailed on this point.[37]
[34] Transcript of proceedings dated 30 August 2024, page 56
[35] Transcript of proceedings dated 25 September 2024, page 62
[36] Transcript of proceedings dated 30 August 2024, page 56
[37] Transcript of proceedings dated 25 September 2024, page 62
I am not persuaded that the evidence allows me to find that a positive representation was made to Mr Halcombe that the premises were quiet. If there had been an advertisement promising quietness, I think it would have come forward to corroborate Mr Halcombe’s position, and the strengthening of Mr Halcombe’s memory at the state of final submissions does not encourage me to accept his evidence on this point, without more. I note, too, that his witness statement of 11 September 2024 begins with his inspection of the premises without mentioning any advertisement, which surely by that stage of the proceedings would have been at least referred to if it had existed. Nor did Mr Halcombe subpoena or otherwise seek to obtain advertising from MARQ.
In the absence of any direct statement by the lessor or his agents, Mr Halcombe is compelled to argue that the lessor’s failure to disclose the remediation works amounts to a misrepresentation by silence — that is, the failure to disclose the remediation works constituted or contained an implied statement that the premises were quiet, within a normal understanding of what residential premises would offer.
A residential tenancy agreement is a contract, governed, in a general sense and where not overtaken by statutory provisions, by the common law of contract. The common law, generally speaking, leaves it to the parties to a contract to protect their own interests, and that understanding is the source of ideas such as due diligence and caveat emptor (let the buyer beware). But in certain areas, and especially where there is perceived to be a power imbalance between kinds of parties, there is a history of statutory intervention to protect the weaker party and clarify the interests of both sides in the event of a conflict. The RTA does this for tenants and lessors in the ACT; the ACL provides protection in the context of transactions in trade and commerce generally.
In a standard contract, the parties may choose to keep certain information to themselves, hoping to obtain an advantageous bargain. The RTA, however, imposes certain disclosure requirements: Division 2.2 requires that, prior to completion and signature of the tenancy agreement, lessors disclose a substantial number of matters to the tenant,[38] including such matters as the energy efficiency rating of the premises,[39] the inclusion in the tenancy agreement of non-standard terms,[40] or a requirement to obtain the lessor’s consent to keeping an animal.[41] By contrast, the tenant is obliged simply to give their full name to the lessor. But none of the lessor’s obligations require them to disclose anything about the quality of the premises, including whether they are quiet. It is left to a prospective tenant to inspect the premises and determine if they are suitable, and, after the tenancy has begun, to complete an incoming condition report. Mr Halcombe could point out, entirely fairly, that an inspection of the premises before the tenancy began did not allow him to become aware of the noisy operations that were about to start; but the RTA provides no remedy for that problem. No doubt some lessors would choose to make a prospective tenant aware of a project of the magnitude of the remediation, but perhaps others would see such a step as likely to lose prospective tenants or encourage them to seek a discount on rent. I note that when Ms Cutts sent out a warning that the work was about to start, she suggested that owners who had rented out their units might let their tenants know; but this was a suggestion, made with regard to existing not prospective tenants, and did not purport to have legal force.
[38] RTA s 12
[39] RTA s 11A
[40] RTA s 11AB
[41] RTA s 11AB
Earlier in this decision I explored the limited number of recorded cases dealing with section 46 of the RTA. The case law on misrepresentation at common law suggests that there is a limited duty of disclosure on entry into a contract, except in special cases.[42] But misrepresentation by silence can found a cause of action in particular circumstances: in Re Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (Henjo),[43] citing W Scott Fell & Co. Ltd v Lloyd,[44] Lockhart J noted that:
At common law, silence can give rise to an actionable misrepresentation where there is a duty upon the representor to reveal a matter if it exists, and where the other party is therefore entitled to infer that matter does not exist from the silence of the representor.
[42] Paterson, Jeannie, Andrew Robertson and Arlen Duke, Principles of Contract Law, 3rd ed., 2009, Thomson Reuters, Chapter 33
[43] [1988] FCA 40 at [38]
[44] [1906] HCA 79
This doctrine would appear to apply to section 46 of the RTA, given how closely that section appears to be modelled on the common law concept of misrepresentation. Most of the case law in this area, however, relates to the ACL (or its predecessor), and to some degree it is governed by that particular statutory context. But a significant shift from the concept of a “duty” lying upon the representor is the statement of French J in Kimberley NZI Finance Ltd v Torero Pty Ltd[45] (Kimberley) that in the absence of a “reasonable expectation” that a matter would be disclosed, mere silence could not support an inference that a fact does not exist.[46]
[45] (1989) ATPR (Digest) 46-054
[46] Kimberley at [71]
In the present case, this means that for Mr Halcombe to succeed, there must have been at least a reasonable expectation that Mr Bobolas would reveal the remediation work and the disruption that it would bring with it, an expectation so clear and strong that Mr Halcombe was entitled to assume in the absence of any statement to the contrary that the premises would be quiet.
From some of his comments, it seems that Mr Halcombe would agree with that proposition. He argued plainly that a lessor has a duty to disclose impending works such as the remediation to a prospective tenant.[47] But it seems to me that for that proposition to hold, at the very least the lessor would need to have been aware of his prospective tenant’s sleeping patterns and sensitivity to noise. Mr Halcombe stated at the hearing on 27 March 2024 that he worked odd hours, often into the early hours of the morning, and as a result frequently slept during the day.[48] Later, when giving evidence on 30 August 2024, Mr Halcombe said that his sleeping patterns were not unusual, although he acknowledged that from time to time he needed to sleep at odd hours. But there is limited evidence that he alerted Mr Bobolas or MARQ to any special patterns, needs or sensitivities of this kind before the tenancy began, or even that he especially valued quietness (the additional emphasis he gave on this point during final submissions, when the evidence could no longer be questioned, makes me unwilling to give his statements too much weight).
[47] Transcript of proceedings dated 27 March 2024, pages 7, 8, 12
[48] Transcript of proceedings dated 27 March 2024, pages 3 and 8
Henjo was a case under the ACL (in fact under its predecessor). It involved the sale of a restaurant and bar, with the court finding that the purchasers had been misled about the number of patrons the premises could lawfully accommodate. That was information that went to the heart of the purpose of the transaction, and the court found that misleading information was conveyed both by positive misrepresentation and by silence on critical issues. Essential to the success of Collins Marrickville in that case was the clear mutual understanding during the contract negotiations that the purpose of the projected transaction was for Collins Marrickville to acquire an operation from which they could expect to derive a predictable revenue stream. Most of the cases dealing with misrepresentation by silence are similar in that they involve contracts between commercial entities and were brought under the ACL.
In the present matter, the remediation project consisted of general works to be carried out over the entire complex; they were to take place under the relevant approvals and, it appears, within defined parameters. According to his evidence, Mr Halcombe contacted both Worksafe and “the EPA”, and was assured that the work was proceeding under “a permit”. The works would no doubt have been disruptive to all the residents of the complex, but the impact might have been minimised by restricting the hours of work. For most people, that might have made the impacts manageable, but for those sleeping during the day or working from home the impacts would have been greater. But I do not think that, in the absence of knowledge about Mr Halcombe’s circumstances, Mr Bobolas’s silence can be regarded as a representation that the premises were, or would be, quiet. It is an unfortunate but inescapable incident of modern life that noisy and disruptive operations take place in one’s vicinity from time to time. In Mr Bobolas’s silence, there was in my opinion no implied false or misleading statement that would satisfy section 46 of the RTA, nor a misrepresentation under the common law.
No false or misleading statement having been made, I do not need to consider whether Mr Halcombe was induced by such a statement to enter the tenancy, nor the question of the proper form of remedy.
An alternative line of argument available to Mr Halcombe — although not one explicitly pleaded by him — was that his lessor breached standard term 52 of the tenancy agreement. That term requires the lessor not to cause or permit interference with the tenant’s reasonable peace, comfort or privacy in use of the premises. If Mr Halcombe’s evidence is accepted — evidence given at length and with fervour — his peace and comfort were very significantly disturbed, perhaps six days each week, for effectively the entire time he spent in the premises.
As noted above, Mr Halcombe has not pleaded the application along the above lines, and that would normally be an obstacle to my considering the issue. But he has laid a great deal of emphasis on the impact of the remediation works on his well-being, physical and mental. That emphasis is difficult to understand in the context of an application under section 46 of the RTA, relating to being induced into the tenancy by a false and misleading statement, when the remedy is termination. The emphasis might therefore lead me to consider whether there is an implied case pleaded for breach of standard term 52 of the tenancy agreement, since under such a case the amount of compensation could be tied directly to the degree to which Mr Halcombe’s peace and comfort has been disturbed.
But there is a further obstacle for Mr Halcombe to overcome. For him to succeed, Mr Bobolas must have caused or permitted the interference with his peace and comfort. Mr Bobolas may be the proprietor of the premises, and a member of the owners’ corporation, but I have no evidence whether he voted, or if he did, in which direction he voted, when issues about the renovation came for decision. And his vote would be one among many. I cannot conclude that Mr Bobolas caused or permitted the disruption of which Mr Halcombe complains. It might be possible to regard the owners’ corporation itself as having interfered with Mr Halcombe’s peace and comfort; but that body is not in a contract with him and is not a party to these proceedings.
Early in the proceedings, Mr Halcombe spoke of the duty that he said a lessor owed a tenant, to disclose projected remediation works or other developments that would affect a tenant’s amenity in leased premises. The reference to a “duty” immediately suggests the possibility of a case in negligence. But Mr Halcombe did not advance a case in those terms, nor attend to the other elements that would be needed to plead such a case.
Were the premises in a reasonable state at the start of the tenancy?
Mr Halcombe asserts that a number of faults in the premises were present from the time he took up the tenancy: a number of appliances did not work, or did not work satisfactorily (the hot water, the dryer, the washing machine, the intercom, the television antenna); the pipes smelt and were infested with spiders and insects; there was a piece of metal sticking out in the shower; and the fire alarms went off frequently for no reason. There was also an issue with the internet connection, which is considered separately below.
Standard term 54 in Schedule 1 of the RTA requires that premises at the start of the tenancy are in a reasonable condition — fit for habitation, reasonably clean, in reasonable repair and reasonably secure. Evidence on these issues is provided for under sections 29 and 30 of the RTA — the lessor must provide an incoming condition report (ICR), and the tenant may comment on that report. The ICR, including any comments by the tenant, can then serve as contemporaneous evidence of the state of the premises at the start of the tenancy. MARQ sent an ICR electronically to Mr Halcombe on 20 June 2023 and he responded that he was unable to open it, and subsequently that he did not have a camera to document the many imperfections and faults in the premises. MARQ sent a reminder on 4 July and followed up with a statement later that day that, no comments having been received, the ICR would be adopted “as is”. Mr Halcombe responded on the same day: “Your form didn’t work making it impossible to update the report to detail the damage to the property not listed on your condition report. This voids your claim.”
Mr Halcombe has maintained consistently that over the early period of the tenancy there was damage to the premises, but he has weakened his position by providing no comment in that first fortnight to give his claim contemporaneous support and specificity. If it was possible for him to send a message to MARQ on 4 July 2023 stating that he could not use their electronic tool, then it must have been possible for him to provide some comments by email, but he did not do so. And although at first he said he could not access the ICR sent by MARQ, he was clearly able to do so subsequently, as he said he did not agree with it, he complained of not having a camera to document the damage, and in the message quoted above he expressed frustration at not being able to document damage “not listed in your condition report”, clearly implying he had access to it. Section 30 of the RTA makes the ICR prepared by MARQ evidence of the premises at the start of the tenancy; I do not have specific evidence on most of Mr Halcombe’s complaints until his counterclaim filed with the tribunal on 19 January 2024. That evidence is not contemporaneous and was assembled in the context of the dispute between the parties.
That is not the entire story, however. In evidence, Mr Chapman said that no complaint about the dryer was ever lodged with his agency. But the documentary evidence shows that MARQ advised Mr Halcombe on 29 June 2023 that they had engaged Adda Appliance Services to attend to the dryer.[49] Mr Halcombe stated that the technician arrived “a day or two later”, fixed the dryer, and helped solve the problem with the television antenna.
[49] Counterclaim of 19 January 2024
It seems that the dryer issue was identified and attended to within the fortnight allowed under the RTA for comment on the ICR. It therefore seems reasonable to draw the conclusion that the dryer was not in good repair at the start of the tenancy. That leaves a number of other matters, however, about which there is little evidence. Mr Halcombe said that the hot water service did not work from the start of the tenancy and he was compelled throughout the winter of 2023 to take cold showers or shower at the office. If so, however, it might be thought that he would have reported this to MARQ, and that this would have occurred immediately, before, for example, he made a report about the dryer; but I have been able to find no such report, or any mention at all of the hot water until the counterclaim of 19 January 2024. Nor is there any documentary record of a report to the lessor about the other matters such as the metal sticking out in the shower or the smells and insect infestations.
Some of Mr Halcombe’s claims go to matters that cannot be laid at his lessor’s door. The frequent triggering of fire alarms in the complex was no doubt annoying, but Mr Bobolas did not cause or permit the consequential loss of peace and comfort. The problem with the intercom system is of the same kind.
Standard term 54 deals with the condition of the premises at the start of the tenancy. Where faults arise later in the tenancy, standard terms 55 and 57 require that the tenant report the fault, and then that the lessor remedies the fault within four weeks; for urgent matters (such as a hot water system), the fault must be remedied “as soon as necessary, having regard to the nature of the problem”.[50] The evidence I have about the state of the premises at the start of the tenancy consists of the ICR, without Mr Halcombe’s comments, and the exchanges about fixing the dryer and antenna. Section 30 of the RTA gives primacy to the ICR as evidence. As for faults arising later, I have no evidence of any reports to the lessor or the managing agents by Mr Halcombe that would trigger the lessor’s obligations to repair.
[50] RTA standard term 59
On 19 January 2024, however, Mr Halcombe lodged a counterclaim in matter RT 1072/2024 in which he asserted that all these faults were present in the premises. That counterclaim therefore put the lessor and his managing agents on notice and triggered the obligation to attend to the identified faults. By this stage the parties were very much at odds with one another, but the contract between them — the residential tenancy agreement — remained on foot. Mr Halcombe was still in occupation and still paying rent. Mr Bobolas remained bound by his obligations as a lessor. There was an inspection of the premises on 11 January, and this was the occasion on which, according to Mr Halcombe, Mr Bobolas assaulted him. But that date precedes the lodgement of the counterclaim, and I can find no record of any attempt by Mr Bobolas or MARQ, then or subsequently, to check on any of the issues raised by Mr Halcombe.
At the hearing on 27 March 2024, Mr Halcombe appeared to regard the deficiencies that he identified in the premises as simply more evidence of the failures of MARQ to manage the premises. But in his amended application of 21 April 2024, he presented the deficiencies as part of his claim for compensation. I am compelled to conclude that at the start of the tenancy the dryer needed repair. I have already expressed some doubt about the hot water system, which surely would have been reported if it was not working. Mr Halcombe has asserted that this and other problems existed but I have no corroboration, nor any persuasive evidence about the extent to which some of the issues led to a loss of amenity (e.g. the washing machine, the piece of metal in the shower, the drains and spiders). But if a hot water system is not working, a report to the property manager or lessor surely triggers an obligation to investigate, and to do so urgently. Having hot water in the kitchen and the bathrooms is a basic amenity in any property. But it seems that MARQ took no action. It is of no matter that perhaps they had already reached the conclusion that Mr Halcombe was a difficult tenant whose claims should be dismissed or ignored.
After Mr Halcombe had vacated the premises, however, MARQ conducted an exit inspection, and the report is included in the papers filed with matter RT 584/2024. None of the faults identified by Mr Halcombe are included in that report.
This leaves the evidence in an unsatisfactory state. I cannot make a finding either that the identified deficiencies were present, nor that they were absent, except for the dryer and antenna. I will order payment of $80 in compensation to Mr Halcombe for the dryer and antenna. I cannot make an order in respect of the failure of MARQ to check on the deficiencies reported by Mr Halcombe on and after his counterclaim of 19 January 2024; it is only a breach if a deficiency is not remedied, and the evidence does not allow me to conclude with sufficient certainty that these deficiencies existed.
Is Mr Halcombe liable for a break fee and other costs?
On 1 July 2024, after Mr Halcombe had left the tenancy, Mr Bobolas lodged an application with this tribunal (matter RT 584/2024) seeking to recover $1,760, being the entirety of the bond paid by Mr Halcombe for the tenancy. On the basis that Mr Halcombe had left the tenancy during the fixed term, the application sought rent unpaid to the date of vacating the premises ($1,257.14), reletting costs ($322.66), and to recover $150 for the callout fee for a visit by a technician to fix an internet problem, incurred at the start of the tenancy. The application went to conference on 8 July 2024; Mr Halcombe was not present, and the Tribunal ordered that $1,729.80 of the bond be released to the lessor and the remainder to the tenant. That order was subsequently set aside, and the application was listed to be heard with Mr Halcombe’s application.
Fixed-term tenancies are intended to provide certainty for both lessor and tenant — certainty of possession of the premises for the tenant and certainty of income for the lessor. Where a tenancy ends before the fixed term is over, the RTA provides for a lessor to recover some part of the lost rent, and some other incidental costs. Section 8 of the RTA provides for the parties to include a break lease fee clause in the tenancy agreement, which prescribes the amount the lessor may recover; in the version of the RTA that applied at the time that the parties entered into their tenancy agreement, the prescribed clause appears at Schedule 2, section 2.1. Where the tenancy agreement does not include a break lease fee clause, section 84 of the RTA allows the lessor to apply to the ACAT for compensation, on terms which differ from, and are potentially more generous to the lessor than, the prescribed break lease fee clause, at the tribunal’s discretion.
The tenancy agreement between Mr Bobolas and Mr Halcombe included the break lease fee clause specified in Schedule 2 of the RTA. The inclusion of that term in an agreement means that it is agreed between the parties that if the tenant leaves before the fixed term ends, the tenant must pay the break fee as set out in the agreement; payment does not depend on the involvement of the tribunal.
The rent left unpaid on Mr Halcombe’s departure does not fall under the break lease fee clause, but rather is recoverable under section 31 of the RTA, which allows a lessor to recover unpaid rent, other unpaid amounts (such as utilities), compensation for repairs or cleaning, and other costs, at the end of a tenancy. In the present context, Mr Bobolas would appear to have a claim under section 31 of the RTA for unpaid rent ($1,257.14, from the ledger material filed) and a further claim under the tenancy agreement for a break fee of up to four weeks’ rent ($1,760). This is based on the fixed term running to 15 June 2024, and 22 May 2024 being the date that Mr Halcombe vacated the premises.
The version of the RTA applying when the tenancy began specifies the following break lease fee clause (appearing as clause 101 in the Act and as clause 7 of the tenancy agreement):
(1) If the tenant ends a fixed term agreement before the end of the fixed term (other than for a reason provided for by the Residential Tenancies Act or the agreement), the tenant must pay a fee (a break fee) of the following amount:
(a) if the fixed term is 3 years or less—
(i) if less than half of the fixed term has expired—6 weeks rent; or
(ii) in any other case—4 weeks rent;
(b) if the fixed term is more than 3 years—the amount agreed between the lessor and tenant.
(2) The lessor agrees that the compensation payable by the tenant for ending a fixed term agreement before the end of the fixed term is limited to the amount of the break fee specified in subclause (1).
(3) However, the lessor and tenant agree that if within the defined period after the tenant vacates the premises, the lessor enters into a residential tenancy agreement with a new tenant, the amount payable by the tenant is limited to—
(a) the amount of the break fee under subclause (1) less the amount of rent payable by the new tenant for the defined period; and
(b) if the tenant vacates the premises more than 4 weeks before the end of the fixed term—the lessor’s reasonable costs (not exceeding the defined cost limit) of advertising the premises for lease and of giving a right to occupy the premises to another person.
(4) In this clause:
defined cost limit means—
(a) if half or more than half of the fixed term has expired—an amount equal to 2/3 of 1 week’s rent; or
(b) if less than half of the fixed term has expired—an amount equal to 1 week’s rent.
defined period means—
(a) if subclause (1) (a) (i) applies—6 weeks; or
(b) if subclause (1) (a) (ii) applies—4 weeks; or
(c) if subclause (1) (b) applies—N weeks.
Nis the number worked out as follows:
The evidence of the ledger provided by the lessor, and his tenant’s admission that he stopped paying rent, lead me to conclude that under section 31 of the RTA Mr Halcombe owes the amount of rent for which Mr Bobolas is pressing. But Mr Bobolas is not entitled to any reletting costs, for two reasons: first, the drafting of subclause (3) above means that the reletting costs can only be recovered if the property has been let to a new tenant within the defined period; and second, the drafting of subclause (3)(b) means that reletting costs can only be recovered if the tenant vacates the premises more than four weeks before the end of the fixed term — and if Mr Halcombe vacated on 22 May 2024, he did so 24 days before the end of the fixed term, i.e. less than the four weeks required.
The first of these reasons may be the result of a drafting error, and I note that the term has subsequently been amended to remove the requirement identified above; but the second reason aligns with the apparent policy intent that a lessor not be allowed to recover costs if those costs were to be shortly incurred in any event because the tenancy was coming to an end. I will make no order for recovery of the reletting costs.
As for the other part of the break fee, namely the four weeks’ rent covered by subclause (1)(a)(ii), Mr Bobolas has not included that amount in his claim. As already noted, where a party is in a position to put forward their case in an informed way, I am not inclined to grant them amounts they might be entitled to but have not sought.
There was a certain amount of debate in the hearing about the opportunities for the tenancy to be ended by agreement between the parties at an earlier date. Mr Halcombe said that he sent a text message to MARQ on 3 July 2023, not even three weeks into the tenancy, asking to escape it; but that this attempt had elicited the response of the lessor’s first application seeking to end the tenancy under section 51A of the RTA for intimidating and abusive behaviour by the tenant. Mr Bobolas said that the message was never received, and suggested that it was a fabrication; and that the tenancy could have been ended easily by agreement under that first application to the tribunal.
So far as I can discern, the truth or otherwise of these assertions is of no bearing on the matters at hand. There may have been opportunities for the parties to end the tenancy at an earlier date, but if there were, they were not taken. The tenancy continued, Mr Halcombe remained in the premises, and he continued to pay rent until shortly before vacating. The parties may each rue these lost opportunities, or blame each other for not taking them, but those opportunities, in all the circumstances, do not engage any provisions of the RTA, or any of the standard terms.
The same is true of the opportunity for the tenancy to end at the initial hearing on 27 March 2024. Mr Halcombe had applied to terminate the tenancy, and the lessor’s agent advised that the lessor had no objection to the tenancy ending; it therefore seemed that a consent order for termination of the tenancy might be possible. But Mr Halcombe said that he had his finances locked away in a term deposit[51] and could only afford to relocate if the compensation he sought was paid to him. This was therefore another opportunity lost, but the circumstances at that time have no bearing on the present decision.
[51] Transcript of proceedings dated 27 March 2024, page 6
Apparently, Mr Halcombe made an approach to Mr Bobolas or MARQ on 1 March 2024 suggesting that the matters between them could be settled without going to any further hearings. Nothing came of that approach. Mr Halcombe drew my attention to it to illustrate his readiness to compromise, and contrasted that with what he said was recalcitrance on the part of Mr Bobolas and MARQ. Whether or not that argument has any merit in itself, it has no bearing on my decision.
Is Mr Halcombe liable for the callout fee of Canberra Communications?
Mr Halcombe had a frustrating experience trying to establish his internet connection in the premises. Much of that frustration attached to the difficulties he encountered in determining where the internet connection in the premises was to be found, but the dispute between the parties relates to an appointment by Canberra Communications to resolve the connection issue. MARQ insists that Mr Halcombe confirmed the appointment, was in the premises when Canberra Communications made the call to the premises, but refused to open the door and let the technician in. Mr Halcombe says that he had arranged for his own internet service provider, TPG, to call and set up his internet, that he told Canberra Communications that he would call on them only if he needed them, that he was away from the premises and in the office at the time Canberra Communications came to the premises, and that when they telephoned him the calls went to voicemail. Accordingly, Mr Halcombe says, he had not agreed to the callout, was not responsible for it, and would not pay the $150 fee that was charged.
This issue has a long and vexed history before the tribunal. Mr Bobolas’s application in RT 1072/2023 includes a claim for the callout fee, and the orders made on 6 December 2023 (made ex parte Mr Halcombe) included an order that Mr Halcombe pay MARQ the $150. Mr Halcombe’s application for interim orders was subsequently supported by his counterclaim of 19 January 2024 seeking substantial compensation (as detailed earlier in this decision). Mr Halcombe also filed a statutory declaration dated 19 January 2024, mainly contesting statements made about him by Ms Cutts and an employee of MARQ, but also including a paragraph contesting MARQ’s account of the dispute over the Canberra Communications callout. Mr Halcombe’s application led to the orders made on 6 December 2023 being set aside on 30 January 2024 (with a note that one of the orders, giving MARQ access for a routine inspection, had already been met); directions were made for the parties to file further evidence and submissions and for the matter to be heard.
No further material appears to have been filed by Mr Bobolas, but Mr Halcombe filed a revised counterclaim on 21 February 2024. The matter was heard on 1 March 2024, and the Tribunal dismissed the application and the counterclaim and noted that if Mr Halcombe wished to pursue the matter in his counterclaim, he would need to file a separate application.
The result of this long process is plainly that Mr Bobolas’s claim to the $150 callout fee has already been heard and decided; the application (in RT 1072/2023) made on 7 November 2023 was partially successful on 6 December 2023; that decision was set aside on 30 January 2024 and the application was heard and dismissed on 1 March 2024. That dismissal includes the application to recover the $150 paid to Canberra Communications. Under estoppel principles, Mr Bobolas is not entitled to bring his claim before the tribunal a second time.
It is not especially clear whether the hearing on 1 March 2024 paid attention specifically to the callout fee, but Mr Bobolas has made no representations to address any shortcoming of that kind. I note too that the evidence suggests that the critical conversation between Canberra Communications and Mr Halcombe left the latter believing that no appointment had been made with Canberra Communications, while Canberra Communications believed the opposite. The critical email, dated 29 June 2023 from what appears to be the administrative arm of Canberra Communications (a person named Kerrie Baynham) to Emma Coleman of MARQ, reports that Mr Halcombe had “pencilled in” an appointment for 3 July; and that he was obtaining help from “an NBN Tech”, and that the Canberra Communications technician would look at the antenna and also deal with any continuing internet issue.[52] Ms Baynham’s understanding was clearly that Mr Halcombe would alert either MARQ or Canberra Communications if the appointment was not needed. Mr Halcombe says that is not the arrangement he made. It might be difficult at this remove to obtain any clarity about that conversation, but I would note that Mr Halcombe has the advantage of having been able to report on it first-hand. Everyone else is relying on hearsay from Canberra Communications, either Ms Baynham or the technician (known only as “Nathan”), neither of whom was called as a witness. I cannot find that the account reported second-hand from Ms Baynham and “Nathan” is to be preferred over Mr Halcombe’s first-hand, and consistently asserted, version.
[52] Attachment to lessor’s first section 51A application
For the estoppel reasons, and for the reasons given immediately above, I will be making no order for Mr Halcombe to pay the callout fee.
Conclusion
Mr Halcombe is unsuccessful in his claim against Mr Bobolas for inducing him to take the tenancy by a false and misleading statement. Mr Halcombe is entitled to $80 for the dryer and antenna. Mr Bobolas is entitled to unpaid rent of $1,257.14. The $1,729.80 of the bond had already been discharged to Mr Bobolas by the time of the hearing. From that amount the $80 for the dryer and antenna and the amounts I disallowed from the bond claim ($150 for the Canberra Communications callout fee and $322.66 in reletting costs) now need to be repaid. This means that the order is for Mr Bobolas to pay $552.66 to Mr Halcombe.
This matter is chiefly characterised by the extreme hostility between tenant and the lessor’s agents. That appears to have led Mr Halcombe to expect action by the tribunal that is not available under the RTA — “to make an example of” or to “throw the book at” an agent, for example. If Mr Halcombe wishes to take action of that kind, he could seek to do so in other ways, for example by lodging a complaint under the Agents Act 2003. The poor relations between agents and tenant may also have led MARQ, on behalf of Mr Bobolas, to adopt a dismissive attitude to their tenant; but regardless of his difficulties as a tenant, he remained in a contractual relationship with Mr Bobolas, and had rights resulting from that contract. And it does appear that early in the tenancy there were opportunities for the parties to end the tenancy by consent, opportunities that were not taken up.
…………………………………
Senior Member M Hyman
| Date(s) of hearing: | 30 August and 25 September 2024 |
| Tenant: | In person |
| Lessor: | Craig Chapman; Emma Coleman Manuel; Suzy Wells; authorised representatives |
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