Hayes v Oliver (Residential Tenancies) - [2021] ACAT 86

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

HAYES v OLIVER (Residential Tenancies) [2021] ACAT 86

RT 164/2021
Catchwords: RESIDENTIAL TENANCIES – smoking in the premises – smoke damage to the walls and curtains – assessment of compensation to lessors who do their own repairs
Legislation cited: Residential Tenancies Act 1997

Cases cited:Faulder v Tran [2018] ACAT 80
Ogbonna v Tankard [2018] ACAT 14

Tribunal:Senior Member A Anforth

Date of Orders:  14 September 2021
Date of Reasons for Decision:      14 September 2021
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          RT 164/2021
BETWEEN:
VICTORIA HAYES
Applicant/Lessor

AND:
DAVID OLIVER
Respondent/Tenant

TRIBUNAL:Senior Member A Anforth

DATE:14 September 2021

ORDER

The Tribunal orders that:

The respondent is to pay the applicant the sum of $7,520.38 in full and final satisfaction of applicant’s claim.
The respondent’s counterclaim for the costs of the garden shed is dismissed.
ACT Rental Bonds on behalf of the Territory is to release the whole of the bond to the applicant in partial satisfaction of the above order.
The respondent is pay the balance of $5,680.38 on or before 31 December 2021.
………………………………..

Senior Member A Anforth

REASONS FOR DECISION

The applicant (lessor) is the owner of a residential property in Canberra and the respondent was the tenant of the property. The tenancy commenced on 13 February 2015 at a rent of $460 per week for a term of one year, which had risen to $665 per week by the end of the tenancy. A bond of $1,840 was lodged with the ACT Rental Bonds. The tenant vacated on 13 January 2021.
On 6 May 2021 the lessor lodged an application with the tribunal seeking compensation for damage to the property and cleaning of the property, largely arising from smoke staining to the walls, curtains and blinds inside the house:
(a)    Replacing of curtains and blinds: $1,070.
(b)    Travel to obtain curtains and blinds: $300.
(c)    Removal of sheer curtains and blinds and re-hanging by applicant personally: $300.
(d)    Painting of living areas and bedroom 4: $5,610.
(e)    Painting of three bedrooms and hall done by the applicant personally: $2,730.
(f)     Removal of shed in the backyard: $880.
(g)    Water consumption: $22.88.
(h)    One week of lost rent while attending to the cleaning and repairs: $665.
(i)     The tribunal filing fee: $162.50.
(j)     Cost of photographic evidence: $29.15.
The claim annexed a ‘History of the Dispute’ and an ‘Index of Documents’ containing 14 sets of documents paginated pages 1-61.
In the ‘History of the Dispute’ the lessor said:
(a)    The house was freshly painted at the start of the tenancy in January 2015.
(b)    The lessor agreed to the garden shed being erected but on the condition that it was removed when the tenant vacated. The lessor expressly denied agreeing to pay the tenant for the cost of the shed.
(c)    During the 2019 inspection a smell of smoke was noted in the house and the agent reminded the tenant that no smoking was permitted in the house.
(d)    At the outgoing inspection the smell of smoke was present along with air freshener. The tenant is alleged to have admitted that he had been smoking in the house.
The annexed documents included:
(a)    The tenancy agreement which contained additional clause 4 that no smoking in the house was permitted.
(b)    The ingoing condition report which shows a range of issues with concerning the state of the premises and garage, including damage to the paint work.
(c)    Periodic condition report of 25 November 2019.
(d)    The outgoing condition report of 14 January 2021.
(e)    Email correspondence between the parties, including an email from the lessor’s agent to the tenant of 13 January 2021 setting out alleged items of damage and cleaning. In particular the email noted smoke staining to the walls in the living rooms and bedroom 4 and to the curtains and the failure to remove the shed in the backyard.
(f)     An email of 5 February 2021 from the lessor to the tenant setting out the lessor’s claim:
(i)      Repainting all living areas and bedroom 4 by the House Facelifters: $5,610.
(ii)     Lessor personally washing down and painting three bedrooms, hall and seven doors with materials over three days: $2,730.76.
(iii)   Replacement of curtains and blinds in all living areas and master bedroom: $1,070.
(iv)   Travel to Spotlight in Queanbeyan to purchase curtains and blinds – three hours: $300.
(v)     Lessor personally removing/washing sheer curtains and cleaning roller blinds and rehanging – three hours: $300.
(vi)   Shed removal, storage and tip fees for shed flooring: $880.
(vii)     Water rates: $22.88.
(viii)   Total: $10,913.64.
(g)    Various invoices and water reading.
(h)    An article from the internet on the best way to remove smoke stains from painted walls.
(i)     Photographs of the shed in the backyard and the pile of its flooring materials.
The tenant filed a response on 4 June 2021. In this response, the tenant:
(a)    Denied that he had been smoking inside or that the walls, curtains and blinds were smoke damaged.
(b)    Asserted that he had an agreement with the lessor to erect the shed and that the lessor would retain the shed and pay him the cost of the shed on his departure.
(c)    Conceded the costs of painting two walls in the lounge/dining room: $300.
(d)    Asserted the paintwork was reasonably new but of a poor standard when he moved in. Photographs were annexed showing the walls at this time. He said that the cleaners from Jim’s Cleaners he retained at the end of the tenancy refrained from cleaning the walls for fear that the cleaning would remove the paint.
(e)    He never received a copy of the outgoing condition report until the tribunal proceedings had started.
(f)     The lessor was planning substantial renovations at the end of the tenant’s lease and so would not have been in a position to immediately re-let the premises.
The Tribunal agrees that the 53 pages of photographs from the start of the tenancy show that the paint work was substantially damaged. It had chips to most corners and architraves and chips to the paintwork on most walls. There were holes and abrasions to most walls. The ingoing condition report reflected these items.
An email from Ms Rankin at Jim’s Cleaners dated 7 February 2021 said she had been cleaning the house for the tenant for two years (under an NDIS contract). She said that she did a final clean and that the smoke staining was limited to one wall in the dining room. No other walls or ceilings were smoke stained.
The matter was listed for conference in the tribunal on 12 April 2021. The dispute did not resolve and it was listed for a hearing on 29 June 2021 by telephone. The lessor appeared in person as did the tenant.
The Tribunal took the parties through the documents in its possession and then recounted its understanding of the issues.
The Tribunal discussed the 53 pages of photographs with the lessor and informed the lessor that it was difficult to reconcile her description of the good state of the paintwork at the start of the tenancy with these photographs.
The lessor affirmed her assertion that the smoke damage to the walls was not limited to one room.
The discussion then turned to the cause of the smoke staining; however extensive it was. The tenant denied smoking inside and said that it could have been caused by a draft coming from the unused wood fire place. The Tribunal asked for the evidence to support that proposition and there was none.
The tenant said he smoked about 10 cigarettes a day.
The Tribunal noted the existence of smoke staining on the walls and the shape left where photographs had hung on the wall. The staining was brown and yellow and demonstrate a flow or drip pattern. The Tribunal informed the tenant that the present member had seen other smoke stained houses in person and by photographs and these photographs were of smoke stained walls. The issue was their cause and not their existence.
The issue of the burn mark in the bedroom carpet was raised. The tenant denied any knowledge of it. The lessor said that the carpets are still in the bedroom.
The lessor said she spent three days at eight hours a day of her time cleaning and painting walls. The Tribunal explained that her time would not be costed at a commercial rate, it would be net of tax that is not payable and without GST. The Tribunal would allow $30 per hour for reasonable time spent doing this work. The cost of materials was $350.
The lessor sought to add the cost of the carpet in the bedroom to the claim. The Tribunal declined the request on the basis of the lateness of the claim, that no actual cost had been incurred and there was a substantial depreciation factor applying to the carpet.
There was a water consumption account that was for the time between the last account to the tenant and when he vacating the premises. The tenant agreed to pay that.
The curtains and blinds in the living areas and master bedroom were seven to eight years old and had been the subject of tax depreciation. The Tribunal observed that there would be little post depreciation value left in them after this time.
Some of the curtains were second hand when installed. With the replacement curtains purchased from a shop in Queanbeyan, the lessor personally spent a day and half hemming them to size and hanging them.
The lessor said that she had removed and stored the shed incurring storage fees. The tenant said he did not want it back. The lessor said that it was valueless and would be taken to the tip.
Brayden Kidd, real estate agent, was called to give evidence by phone. He had attended the premises at the end of the tenancy and had arrange the cleaners, House Facelifters, to attend. He said the walls were cigarette stained. The staining was a yellow tinge and came off with washing, leaving a shadow.
Ms Tina Rankin was called to give evidence by phone. She affirmed her prior email statement that she did not think the walls needed repainting beyond the those in the living room. She said that she attended after the final clean her staff had carried out. She said that there were no ‘major smoke’ smells other than when the tenant was personally near her.
The Tribunal informed the tenant that it was satisfied from the total of the evidence that there had been smoking inside which had damaged the walls.

The relevant law

The Tribunal adopts the statement of law set out in Faulder v Tran [2018] ACAT 80 in relation to:
(a)the standard required of the premises at the commencement of the tenancy [23]-[36], [82]-[89], [140]-[145]; and
(b)the rate of compensation to the lessor for their own labour in carrying out repairs [54]-[70], [92]-[105].
The Tribunal adopts the statement of law set out in Ogbonna v Tankard [2018] ACAT 14 at [39] in relation to the tenant’s duty when returning the premises at the end of the tenancy.

Consideration of the issues

The tenant does not dispute the claim for the outstanding water consumption $22.88 or for the cost of painting the living room at $300.
The smoke damage to the walls, sheer curtains and blinds
The Tribunal is satisfied that the staining on the walls was cigarette smoke. It was not there in the photos at the start of the tenancy but is there at the end of the tenancy. The tenants suggested that it could have been caused by the unused wood fireplace or possibly by smoke during bushfires. If it was caused by bushfires then the Tribunal would expect to see the same issue arising in other houses in Canberra. The fireplace hypothesis is pure speculation without any evidence to support it.
The Tribunal is satisfied that the most likely cause was the tenant smoking inside.
The tenancy agreement prohibited smoking inside and for good reason. Leaving substantial smoke staining on the walls, curtains and blinds is not ‘fair wear and tear’. It is the outcome of a breach on the tenant’s part.
There is some difference in the evidence concerning the extent of the smoke staining. The lessor and the agent testified that the staining was present in all rooms to varying degrees but particularly in the living room and bedroom 4. The repainting of these areas was undertaken by House Facelifters at a cost of $5,610. This covered the areas in which the tenant conceded the need for repainting of two walls. The Tribunal allows this claim.
The lessor personally washed down the walls and doors in the other three bedrooms and the hall, which she said took her three full days. She then personally painted these walls.
The regular cleaner retained by the NDIS testified that smoke staining on these areas was not evident to her.
The Tribunal is satisfied that the degree of smoke staining in the living area and bedroom 4 made it likely that some of smoke would have escaped those areas into the other three bedroom and hall. Some cleaning was likely to be needed.
The complicating factor is that the painting on the walls was already in a deteriorated state at the start of the tenancy and when the tenant’s cleaners attempt to clean the walls, they observed that the paint was lifting.
The lessor had a choice of how she dealt with the other three bedrooms and the hall. They were not badly stained as necessitated their cleaning and re-painting. The lessor may choose to do so for presentational purposes with the next tenant, but that would be the lessor’s personal and commercial choice. Those rooms had been painted some five years previously just before the commencement of the tenancy, even though it appears to the Tribunal that this job was of a low quality. The lessor would have claimed a tax depreciation on that paint job.
On the whole the Tribunal is not satisfied that the condition of these other walls and hall at the end of the tenancy was such as required the three days of cleaning and repainting as claimed by the lessor.
The sheer curtains and blinds
The smoke that caused the substantial staining in the living areas and bedroom 4 would not have been confined to the walls and ceiling. It would be inevitable that the smoke would also have infected the sheer curtain and blinds.
The Tribunal accepts that it would have been necessary to at least wash these curtains and blinds, but that may not remove the smoke smells. In the end the lessor replaced them.
Some of the curtains and blinds were secondhand when the lessor first hung them in the living areas and were obtained by the lessor from a family member free of charge.
Any actual cost to the lessor would also have been the subject of a tax depreciation claim by the lessor. The purchase of the new sheer curtains and blinds will also be the subject of a tax depreciation claim.
At most the lessor has suffered a small loss from the life expectancy of the curtain and blinds, assessed on the basis that the tenant had smoke damaged them. The Tax Office life expectancy is 10 years. The lessor had about five years or more use. The curtains and blinds were secondhand to begin within. It is hard to assess what remains of any actual loss to the lessor from the replacement of the curtains and blinds. The Tribunal does not allow any amount for this part of the claim.
The lessor has incurred the costs of taking down the curtains, choosing new curtains, fitting and rehanging them, for which the lessor claims $600. The lessor said that it took her six hours in total for this work i.e. at $100 per hour.
The lessor is entitled to do the work herself rather than hire commercial tradespersons at a higher cost. But the lessor is not entitled to claim the same labour cost as commercial tradespersons because that it not a fair estimate of her actual costs. The costs of commercial trades people have to factor in:
(a)their set up infrastructure including their premises, advertising, equipment, staff, workers compensation, public liability insurance, retention of qualifications etc;
(b)tax to be paid on their earnings; and
(c)GST to be collected and remitted to the Tax Office.
The lessor carrying out her own cleaning and hanging of the blinds and curtains does not have these charges and pays no tax on the compensation recovered from the tenant for this work. It is true that there may be an opportunity cost to the lessor in that she could have used the time she spent cleaning and hanging, doing other income earning activities. But this was her choice, and in addition, there was no evidence of any foregone profits from this cause.
The work of cleaning and hanging curtains may be laborious but it is not a highly skilled task. The lessor has claimed $100 per hour. An experienced commercial handyman could have done this work at an approximately rate of $60 per hour. From this rate must be deducted a discount for the savings to the lessor set out at [45] above. The Tribunal allows $30 per hour for the lessor labour for the six hours claimed giving a total of $180.
The cost of removing the shed
The Tribunal is satisfied that the lessor did not hold out to the tenant that she would purchase the shed from him at the end of the tenancy. The lessor gave the tenant permission to erect the shed provided he removed it at the end of the tenancy. He did not remove it and in fact left a very big mess from the water soaked paper and cardboard he had used as a floor to the shed.
The lessor was put to the costs of removing and storing the shed pending the tenant collecting it. The tenant said he does not want the shed and the lessor does not want the further cost of storing. The lessor can now dispose of the shed in any manner she sees fit, including to the tip.
The lessor has made a claim of $880 for the costs of having the shed removed and stored. This includes the estimated tip charges. The Tribunal allows this claim.
Foregone rent
The lessor has claimed one week of foregone rent for the period in which she had the premises cleaned and painted. She could not put the property back on the market for this time.
It was the tenant’s duty to return the premises at the end of the tenancy in the same state in which it was received minus fair wear and tear. The tenant did not do so. The lessor’s claim for one week of the premises being off the market whilst the cleaning and painting was done, is reasonable and is allowed.
Tribunal fee and cost of photographs
The lessor has incurred the cost of the Tribunal lodgement fee which is allowed.
The lessor also claims the cost for time spent in preparing her case before the Tribunal, including research time and the cost of photographic evidence for her case. The Tribunal is a no costs jurisdiction and that excludes the time costs and out of pocket costs of the parties. This part of the claim is not allowed.

Conclusion

The Tribunal allows the following of the lessor’s claim:
(a)The cost of commercial cleaning and re-painting the walls of the living rooms and bedroom 4: $5,610.
(b)The time cost of replacing the curtains and blinds: $180.
(c)The costs of removing the shed: $880.
(d)The foregone rent: $665.
(e)Water consumption charges: $22.88.
(f)The Tribunal lodgement fee: $162.50
This gives a total of $7,520.38.
The tenant’s counter claim for the cost of the garden shed is dismissed.
………………………………..

Senior Member A Anforth

Date(s) of hearing	29 June 2021
Applicant:	In person
Respondent:	In person