Ian & Rosemary Hendry v Sean Hutchens & Fabian Van Haeften; Sean Hutchens & Fabian Van Haeften v Ian & Rosemary Hendry

[2006] ACTRTT 21

Ian & Rosemary Hendry v Sean Hutchens & Fabian Van Haeften; Sean Hutchens & Fabian Van Haeften v Ian & Rosemary Hendry [2006] ACTRTT 21 (1 November 2006)

CATCHWORDS
Notice to vacate – Rental arrears – Periodic tenancy - Oral fixed term tenancy agreement – Bond– Rental reduction - Urgent and non-urgent repairs – Compensation - Removal of tenants’ property

LEGISLATION
Residential Tenancies Act 1997 (ACT)

Sections 6A, 38, 47, 57, 61, 102 and 104  

Standard Residential Tenancy Terms – Clauses5, 55 -57, 59-60  and 96

CASE LAW

Case Reference Number:     RT 06/2079 and RT 06/2118

Re: Premises at 15 Batman Street, Braddon, ACT 2612

Decision

1.That the Residential Tenancy Agreement is terminated and possession of the premises is to be given to the lessors at 5pm on 31 October 2006.

2. That the Deputy Registrar is to issue a warrant for eviction for the above premises.

3.That Order 2 above is suspended for a period of 21days.

4.That the tenants are to remove all goods and return the premises in a clean condition by 5pm on the 21 November 2006.

5.That any goods belonging to the tenants remaining on the premises after the date that vacant possession is given will be deemed uncollected goods and the Uncollected Goods Act applies to their storage and disposal.

6.That the tenants shall pay the lessors an occupation fee at the rate of $35.71 per day from 31 October 2006 until the date that vacant possession is given.

7.Leave is given to either party to re-list both matters on 14 days written notice after the date the tenants vacate the premises for the Tribunal to consider and determine, subject to the Tribunal’s findings set out in paragraphs 58 to 61of the attached Statement of Reasons, the amount of rent outstanding and payable at the date of vacation by the tenants to the lessors.

8.The tenants shall be credited with a rental rate reduction of $40 per week under section 71 of the Act for the period from the mid-December 2005 until 6 June 2006, being a total of 22 weeks, in the total sum of $880.

9.The lessors are to pay the tenants compensation of $1,500 under section 104(l) of the Act for the work actually carried out on the premises.

10.The compensation of $1,500 is, firstly, to be deducted from any rental arrears the tenants may owe at the date they vacate the premises and secondly, any of the compensation not so deducted is to be paid by the lessors to the tenants jointly.  The tenants are to agree between themselves how to apportion the compensation so paid.

Member:  J. A. David
Date: 1 November 2006

STATEMENT OF REASONS

BACKGROUND

1These two matters concern disputes involving the premises at 15 Batman Street, Braddon in the ACT.  The first [RT 06/2079] is an Application by the lessors seeking a termination and possession order and resolution of rental arrears and bond disputes. The second [RT 06/2118] is an Application by the tenants seeking compensation and resolution of the following disputes - rental bond, breach of tenancy agreement by lessors, completion of urgent and non-urgent repairs, retaliatory action, compensation and rental reduction. The two matters were ordered to be joined at the initial hearing on 17 August 2006. 

2The lessors entered into a residential tenancy agreement in relation to the premises at 15 Batman Street, Braddon with three tenants - Ben Gilbert, Elanor Lawson and Robert Keca for one year from 10 April 2000 to continue as a periodic tenancy from month to month thereafter.  The weekly rental was $250 payable fortnightly in advance to the lessors.  There was no dispute that a rental bond of $880 was paid. 

3Over the following years as a tenant left, the other tenants organised a replacement tenant who paid their part of the bond directly to the outgoing tenant.   By mid-2005 Robert Keca was the only original tenant living at the premises.

4Sometime in the latter part of 2005 the tenant Sean Hutchens moved into the premises.  There was no dispute that he did not pay a bond.  Robert Keca personally paid the outgoing tenant’s share of bond to the outgoing tenant.  Initially, Sean Hutchens paid rent of $180 per fortnight directly to Robert Keca.  

5Another tenant Fabian Van Haeften moved into the premises on 16 March 2006, paying a bond of $320 to another departing tenant.   The tenants Sean Hutchens (from January 2006) and Fabian Van Haeften paid rent directly to the lessors.  

6Robert Keca, the remaining original tenant, left in mid-May 2006 though his tenancy continued until 28 May 2006.  He owed rent which the lessor, Ian Hendry, said Robert Keca asked him to take from Robert’s share of the original bond.

7The tenant Sean Hutchens had difficulties paying rent and by end of March 2006 he owed rental arrears of $1,080.   In late March or early April he had a meeting with the lessor Ian Hendry in which Sean Hutchens suggested to the lessor, Ian Hendry that if he, Sean Hutchens, undertook repairs to the premises the lessor could waive the rental arrears.  The lessor and Sean Hutchens came to an oral agreement.  The terms of that agreement, are strongly in contention.  There was no dispute that the lessor agreed the lessors would waive the tenant Sean Hutchens’ rental arrears in return for work: there was dispute about what work was to be undertaken and whether there were additional terms included in the agreement. 

8Various repairs to the premises were carried out by the tenant Sean Hutchens with some assistance by the tenant Fabian Van Haeften and the lessor Ian Hendry during the period March to 31 May 2006.  There was agreement that repairs to two rooms (Bedroom 1 and kitchen) in the premises have not been completed.

9On 24 May 2006 the lessor, Ian Hendry, handed to the tenant Fabian Van Haeften what the lessor referred to as a “draft lease”.  That draft specified the lessors’ names and address, the tenant/s address as the address of the premises and a rental of $250 per week.  The names of tenants, the term and a commencement date were not filled in.

10On 31 May 2006 the lessor Ian Hendry orally offered Sean Hutchens a 6 months lease at $300 per week.  The lessor gave evidence that he also said that after those 6 months he intended to rent the premises for another 6 months at a rental of $350 and intended a further rental increase for a further term thereafter. The tenant Sean Hutchens refused those terms immediately.  The lessor stated that he then withdrew the offer. 

11On 1 June 2006 the lessors handed to the tenants a Notice to Vacate giving 4 weeks notice on the ground that the lessors’ daughter intended to move into the premises.  Three other concerns were also listed in the Notice: rental arrears; a dog being on the premises contrary to the terms of the original tenancy agreement; tenants being in the premises who were not on any lease agreement.  The Lessors commenced proceedings RT 2079/06 on 2 June 2006.  On 19 June 2006 the tenants lodged their Application in proceedings RT2118/06.  The lessors then sought legal advice and filed an amended Application in proceedings RT2079/06 on 22 June 2006.   

12The lessors sought the following relief:

·     An order of termination of the occupancy/tenancy at the earliest possible date.

13The tenants sought the following relief:

·     An order endorsing that the tenants have a fixed term tenancy agreement at the same rent to run until June 2007. 

·     An order under section 104 of the Act restraining the lessor from breaching that agreement by attempting to terminate the lease and/or increase the rent.

·     An order under section 71 of the Act as compensation for the additional interference to their quiet enjoyment of the premises caused by:

o   The current state of the premises

o   The failure of the lessor to complete urgent repairs in the necessary time frame

o   The failure of the lessor to complete non-urgent repairs in an appropriate timeframe

o   The lessors’ removal of tenant’s property without permission

o   The lessors’ attendance at, and subsequent refusal to leave, the residential premises at approximately 3.15pm on Wednesday, 7 June 2006 until the intervention of police. 

·     An order under section 104 of the Act

o   An order to stop the lessor obtaining the bond held by the Office of Rental Bonds against the residential premises; and/or

o    A determination which recognises Mr Van Haeften’s payment of $320 in bond; and

o   A determination whether it is appropriate for the tenants to be paid any moneys including out of the balance of any remaining bond moneys, in accordance with any orders that the RTT may make under section 71 of the Act. 

14At the initial hearing on 17 August 2006, exercising its power under section 102 (1)(c) of the Residential Tenancies Act 1997 (ACT) [the Act] the Tribunal ordered the matters be joined. 

15The matters came before the Tribunal on 17 August, 7 and 11 September 2006.  In all the matters were before the Tribunal for 8 hours.  Both lessors and both tenants gave oral evidence, also a former tenant.  On 11 September 2006 the matters were adjourned, the Tribunal reserving its decision.  The parties were given leave to file further written submissions if they so desired.  The lessor lodged further written submissions on 18 and 20 September 2006 and the tenants on 18 September 2006.

16The tenants’ further written submissions lodged on 18 September 2006 included material marked “To be opened only by the Presiding Member – subject to her decision”.  The requirements of natural justice and procedural fairness require that any material relied on by a party to a hearing must be made available to the other party so that party can comment on it and/or object to its tender. In the circumstances the Tribunal did not open the envelope so marked and did not read or rely on the material therein to come to the decision below. 

17The Tribunal makes an apology to the parties for any inconvenience caused by the time taken to complete these Reasons.  The complexity of the issues pleaded together with the length of time the proceedings took, have meant the Tribunal spent considerable time considering the oral and documentary evidence, the pleadings and all the written submissions of the parties before coming to its decision.  

DOCUMENTARY EVIDENCE

Applicant Lessors

18The Applicants submitted the following evidence:

·Statement of Particulars Application RT 06/2079

·Summary of Particulars Application RT 06/2079

·Statement Contesting/Defending Application RT 06/2118

·Statement of Issues in Reply RT 06/2079 and RT 06/2118

·Letters from tenants of other properties of the lessors:

·     Dianne and John Gray

·     Melissa Williams

·     Sophie Barnet and Celeste Croteau

·     Nigel McRae

·    Letter from former tenants of the premises, Ben Churchill and Scott Howie, dated 14 January 1998

·    Tax Invoice and Receipt No 080496 from G Casselden Plumbing dated 12 December 2005

·    Tax Invoice No 183621 from G Casselden Plumbing dated 1 June 2006

·    Tax Invoice dated 1 June 2006 No 183620 and Receipt dated 22 June 2006 from G Casselden Plumbing

·    Tenancy Agreement with lessors details and no other information filled in

·Allhomes.com.au listing of rental properties in Braddon dated 24 July 2006

·Receipt and Record of Rental Payments from July 2005 - June 30 2006

·The Canberra Times L J Hooker property to let notices undated

·Termination Notice dated 1 June 2006

·Draft letter to Mr Robert Keca dated 1 May 2006

·Letter from Mr Robert Keca undated

·The Canberra Times “property to let” advertisements dated 27 may 2006

·Allhomes.com.au listing of rental properties in Braddon dated 2 June 2006

·Further written submissions dated 18 and 20 September 2006

Respondent Tenants

19The Respondents submitted the following evidence:

·Statement of Particulars Application RT 06/2118

·Summary of Particulars Application RT 06/2118

·Statement Contesting/Defending Application RT 06/2079

·Statutory Declaration of Fabian Van Haeften dated 17 August 2006

·Document headed Residential Tenancies Tribunal of the Australian Capital Territory undated  containing Statement of Issues complying with orders by the Tribunal on 17 August 2006 with

·     Copy of Quote P-2034 from Canberra Paining Service dated 31 July 2006

·     Copy of handwritten Quote from Peter Painter dated 22 July 2006

·     Copy of Quote 0251 from Tiny’s dated 22 July 2006

·Invoice for Works Undertaken at 15 Batman St by Sean Hutchens

·Bundle of receipts

·Photographs entitled “Toilet – After Painting (Aug 06)

·Photographs entitled “Bedroom 2 – After Renovation Aug 06”

·Photographs entitled “Lounge Final (after Renovation) Aug 06”

·Photographs entitled “Bathroom Final renovation Aug 06”

·Photographs entitled “Hallway – Painting Completed Aug 06”

·Photographs entitled “Bedroom 3 Final (Painting Completed) Aug 06”

·Photographs entitled “Kitchen Unrenovated (Aug 06)”

·Photographs entitled in Bedroom Aug 06”

·Handwritten Notes entitled “Wed 31 May 06”

·Letter from Welfare Rights & Legal Centre dated 7 September 2006

·Signed written Statement of Kathryn Clarke CPA undated

·Further written submissions dated 18 September 2006 together with sealed envelope not opened by the Tribunal Member.

ISSUES IN DISPUTE

20The Tribunal accepts the lessors’ submission that there is no dispute that at the meeting in late March or early April 2006 the lessor Ian Hendry agreed to waive the tenant Sean Hutchens’ rental arrears of $1,080 in return for work.  What is in dispute is the terms of that oral agreement:

a.    The amount, quality of the work and length of time the tenants were to undertake in return for waiver of the rental arrears.

b.The amount of assistance with the repairs, including equipment and supplies, the lessor Ian Hendry was to provide.

c.Whether the lessor Ian Hendry further agreed if the tenant Sean Hutchens completed the work (or renovated the premises) to a fixed term of at least 6 months (or for 12 months and/or with an option for a further 12 months) of the premises to the tenants Fabian Van Haeften and Sean Hutchens for the same rent of $250 per week: to commence either in May 2006 when the original tenant Robert Keca left or in June 2006 (or later) when the work was completed.

d.Whether the lessor Ian Hendry agreed to a rental reduction of $70 per week from 28 May 2006 when the tenant Robert Keca left until the work was completed, expected to be in June 2006 or later.

17.Also in dispute is:

a.Whether the lessors’ Notice to Vacate dated 1 June 2006 is a valid notice to vacate.

b.Whether the tenants owe rental arrears and, if so, the amount of the arrears

c.Whether the amount of $130 spent by the tenant Sean Hutchens on materials for the work has been reimbursed by the lessor or is to be credited to the tenants’ rental arrears.

d.Whether the tenants are entitled to a reduction in rent under section 71 of the Act and, if so, in what amount and for what period. 

18.The Tribunal notes that the lessors in their submissions after the hearing on 16 August 2006 stated that they acknowledged that $320 of the bond moneys, released by the Office of Rental Bonds to the lessor after the original tenant Robert Keca left the premises, belongs to the tenant Fabian Van Haeften.  The lessors further stated they would reimburse that “bond” money to Fabian Van Haeften when he leaves if the rent is up to date and there is no damage to the property.  This acknowledgement and undertaking effectively answers that part of the tenant’s application for a determination which recognises Mr Van Haeften’s payment of $320 in the bond.

RESIDENTIAL TENANCY ACT 1997

21The sections of the Residential Tenancies Act 1997 most applicable to this tenancy dispute are sections 6A, 38, 47, 57, 71, 102 and 104 of the Act together with Standard Residential Tenancy Terms – Clauses 5, 55 -57, 59-60 and 96 (Standard Terms).

FINDINGS AND REASONING IN RELATION TO INDIVIDUAL ISSUES

19.The Tribunal’s task in determining the issues in this matter was complicated by the informal and mostly undocumented the leasing arrangements in relation to these premises.   The Tribunal is surprised at this situation given the tenants each have a law degree: the tenant Fabian Van Haeften is a practicing lawyer in the ACT and the tenant Sean Hutchens has been a volunteer worker with the Welfare Rights and Legal Centre in the ACT.   The informality has led to many difficulties, including a breakdown in the relations between the tenant Sean Hutchens and the lessor Ian Hendry such that the police became involved in an event that took place between them in the front of the premises on 7 June 2006.   Tribunal strongly recommends to all parties to any leasing arrangement that they ensure they sign written tenancy agreements to lease premises and that any variation to such an agreement is clearly and specifically documented and signed by all parties.

Fixed term tenancy or periodic tenancy

20.There was no dispute that the original written residential tenancy agreement was entered into in 2000 between the lessors and three tenants of whom only Robert Keca remained until 28 May 2006.  The other two original tenants were replaced by new tenants chosen by the tenants themselves.  The original fixed term expired in 2001 and thereafter under the terms of the residential tenancy agreement the tenancy reverted to a periodic tenancy from month to month.  The original bond of $880 was paid and lodged with the Office of Rental Bonds apparently prior to the original tenancy agreement and was in the name of other previous tenants.  The lessors acknowledged during the hearings that both the original tenant, Robert Keca and the tenant Fabian Van Haeften had each paid a $320 bond. 

21.The first issue to be determined is: does the periodic tenancy still exist or, if not, what tenancy and/or occupancy agreement, if any, is there between Sean Hutchens and Fabian Van Haeften, and the lessors, Ian and Rosemary Hendry.

22The relevant section of the Residential Tenancies Act 1997 (ACT) is section 6A which provides

“6A (1) An agreement is a residential tenancy agreement if, under the agreement —

(a) a person gives someone else (the tenant) a right to occupy

stated premises; and

(b) the premises are for the tenant to use as a home (whether or not

together with other people); and

(c) the right is given for value

.

(2) The agreement may be —

(a) express or implied; or

(b) in writing, oral, or partly in writing and partly oral.

(3) The right to occupy may be —

(a) exclusive or not exclusive; and

(b) given with a right to use facilities, furniture or goods”

23Thus section 6A provides for a residential tenancy agreement to be oral or partly oral and partly written.  The issue is whether the lessor Ian Hendry and the tenant Sean Hutchens did enter into an oral agreement during a meeting in late March/early April 2006 for a fixed term tenancy and, if they did, what were the terms of that tenancy. 

24Only the lessor and the tenant were present at the meeting in late March/early April 2006, so the evidence of the other tenants, Fabian Van Haeften, Catherine Clarke and Rosie Hendry and of the lessor Rosemary Hendry in relation to a new fixed term tenancy agreement is hearsay evidence based on what the tenant Sean Hutchens or the lessor Ian Hendry said to them about that conversation.  The fundamental principle of hearsay evidence is that hearsay is not admissible to prove the existence of a fact that the person who made the statement intended to assert by the statement.  The evidence does go towards the consistency of representations by a person asserting the statements and thus to their credibility.  The lessor Ian Hendry and the tenant Sean Hutchens each gave evidence of differing understandings of the content and outcome of the conversation.  There was obviously a genuine difference of understanding whether any agreement in relation to a further tenancy had been reached during that conversation.  

25After long deliberation and perusal of all of the oral and documentary evidence and submissions of the parties, the Tribunal has decided that on the balance of probabilities there was no fixed term tenancy agreed to between the tenant Sean Hutchens and the lessor Ian Hendry at their conversation in late March/early April 2006.  As well as all the oral and documentary evidence and submissions, the following factors particularly influenced the Tribunal in coming to that conclusion:

o   The original tenancy agreement was for a fixed term followed by a periodic tenancy from month to month.  The lessors stated they understood that when the final original tenant, Robert Keca, left the premises, a new lease would be necessary as he was the only tenant left who was named in the lease.  Robert Keca gave notice to the lessors in late April 2006 and, whilst he vacated the premises in mid-May 2006, he paid rent until 28 May 2006.  Thereafter the lessors understood that a new tenancy agreement was needed as an immediate necessity.

o   By end of March/early April 2006 the lessors were aware of difficulties in relation to the tenancy, including the non-payment of rent by the tenant Sean Hutchens and the non-payment by the tenant Sean Hutchens of an outgoing tenant’s share of the bond.  The lessors stated that they were also aware the tenant Robert Keca personally had paid the bond not paid by the tenant Sean Hutchens to the outgoing tenant.  The lessor Ian Hendry further stated he understood that had led in part to the deterioration in the relationship between the tenants Sean Hutchens and Robert Keca.   Relations between the tenant Sean Hutchens and the tenant Robert Keca had deteriorated to the extent that the tenant Sean Hutchens drafted a Termination Notice to Robert Keca dated 1 May 2006 which he suggested the lessor Ian Hendry sign.  The lessor refused.

o   The lessor Ian Hendry in oral evidence stated that there had been no formal meeting in late March/early April 2006, merely that he had had a discussion with Sean Hutchens in which he raised the rent of $1,080 owing by Sean Hutchens and that all he had agreed to was waiving the rent owing if Sean repaired cracks in the internal walls of the premises.  The lessor said that they may have discussed the fact that a new lease would be needed but was definite that no terms were agreed at the meeting.

o   There was obviously confusion as to what work was to be undertaken by the tenant Sean Hutchens: the lessor Ian Hutchens saying it was “repairing or fixing up cracks in the walls”, estimated to take between 5-10 days, and the tenant Sean Hutchens saying it was to undertake significant “renovations” to the premises, which are apparently largely completed.  The tenant Sean Hutchens stated the repairs have taken the tenants a significant amount of time longer than the lessor’s estimate of 5 days.  The same confusion existed as to what was “agreed” or not agreed in relation to any new tenancy that may have been discussed during the conversation at the end of March/early April 2006. The tenant Sean Hutchens stated in oral evidence he had ‘implied an agreement by what the lessor had said”.  He stated there had not been a “direct agreement”.  

o   There were differences in the various submissions and statements of the tenants whether there would be a 6 or 12 month fixed term tenancy and whether it was to be followed by a 6 or 12 month further fixed term tenancy. 

o   The Tribunal notes that neither party set down in writing to the other party any of the claimed agreements from the meeting in late March/early April 2006.

o   The tenant Fabian Van Haeften, in his Statutory Declaration confirmed in his oral evidence stated that he had met the lessor Ian Hendry shortly after the meeting in late March/early April 2006.  Fabian Van Haeften had said he thought the lessor was “getting a good deal in relation to his agreement with SH regarding the renovations and the rental arrears”.  The lessor replied that there was no agreement between Sean Hutchens and the lessor. 

o   The lessor Ian Hendry said he provided a draft lease to the tenant Fabian Van Haeften in mid-May 2006 that was a photocopy of an old uncompleted one.  The lessor stated he said to the tenant Fabian Van Haeften “When Rob goes we’ll have to formalise a lease”.  The lessor was adamant the draft was not an offer of a tenancy; it was to be filled in when the terms of a future tenancy were agreed.   He said he was not sure why the details of the $250 per week for the rent had been photocopied.  He thought it may have been a photocopy of a photocopy of the original lease with parts blanked out or even a photocopy of another lease. 

o   The lessors acknowledged there was an agreement for the lessors to waive Sean Hutchens’ rental arrears of $1,080 if Sean Hutchens undertook repairs to the cracked walls in the premises. 

o   The lessors did acknowledge that there was an offer made to the tenant Sean Hutchens on 31 May 2006 of a new fixed term tenancy for 6 months at a weekly rent of $300.  The tenant Sean Hutchens refused immediately and the offer was then withdrawn by the lessor Ian Hendry. 

o   It is unlikely the lessors would have agreed to an open ended time for any new tenancy to begin; for instance, when the tenant Sean Hutchens finished the work.   As the lessors said in their written submissions dated 20 September 2006 “...it would not be common business sense to enter into an agreement which places the control of finalising works and paying full rent in the hands of the tenants.”  In paragraph 1(d) of their Statement Contesting/ Defending Application RT06/2118 the lessors also stated more cogently their argument which they supported in their evidence that:

“The assertion by the Applicants [the tenants] that they were to pay a reduced rate of rent until the renovation work was completed, in circumstances when Mr Hutchens has undertaken to complete the repairs to the cracking of the plaster in return for a waiving of rental arrears in the value of $1080, is not logical.  There is no incentive for the Applicant to complete the work which is contingent on him first completing his works so that the painting and the carpet can be completed.”

26There being no oral fixed term tenancy agreement, the Tribunal finds there was a continuing periodic tenancy from month to month between the lessors Ian and Rosemary Hendry and the tenants Sean Hutchens and Fabian Van Haeften existing at the date of the Notice to Vacate, 1 June 2006.  Under section 6A of the Act a residential tenancy agreement can be express or implied and party oral and partly in writing.   The Tribunal is satisfied that on the balance of probabilities the intention demonstrated by the actions of the parties was for the tenants to occupy the premises under the terms of the continuing periodic tenancy.  The Tribunal bases it’s finding on all the evidence and written submissions of the parties and particularly on the following evidence:

·     The tenants had each paid as their “share” of the rent an amount calculated as a proportion of the rent due under the original residential tenancy agreement for whichever tenant they replaced;

·     The tenant Sean Hutchens paid his share of the rent directly to the lessors from January 2006 and the tenant Fabian Van Haeften paid his share of the rent directly to the lessors from mid-March 2006; and

·     The lessors accepted the direct payments of rent from each of them. 

Notice to Vacate

27The lessors handed to the tenants a Termination Notice on 1 June 2006 giving the tenants 4 weeks notice to vacate the premises on the ground that the lessors “need vacant possession of this property as our immediate relative (daughter) intends to live in the property”.  There were three other “concerns” given as the grounds for the notice: rental arrears, subletting without verbal or written approval and a dog on the premises.  However, at the hearing the lessors relied on the first ground under Clause 96 of the Standard Residential Tenancy Terms, Schedule 1, Residential Tenancies Act 1997 (ACT) [Standard Terms].

28The form of the Termination Notice satisfies the requirements of Clause 83 of the Standard Terms: it includes the address of the premises, the ground on which the notice is issued together with sufficient particulars to identify the circumstances giving rise to the ground and specifies that the lessors require vacant possession by the expiry of the required notice period.

29The Notice did not specify that the tenancy would end on the day the tenants vacated the premises.  The omission of this final requirement is such that the Tribunal is satisfied that “the defect did not, and is not likely to, place the tenant[s] in a significantly worse position than the tenant[s] would have been in had the notice been in, and served in, accordance with the Standard Terms.”  Therefore, the Tribunal will exercise its powers under section 59(2) of the Act and waive this minor defect in the Termination Notice dated 1 June 2006.

30Clause 96 of the Standard Terms sets out the periods and grounds on which a lessor may serve a notice to vacate on a tenant.  Sub-clause (1)(b) of Clause 96 provides the following ground:

“b.4 weeks if the lessor genuinely believes the lessor’s immediate relative intends to live in the premises;”

Sub-Clause 96 (2) defines “immediate relative” as including a daughter.  Therefore, the issue as to validity of the ground is whether the lessors genuinely believed their daughter intended to live in the premises at the time they issued the Notice.

31Both lessors gave evidence that they genuinely believed their daughter, who currently resides with them recuperating from hospitalisation in November 2005, intends to live in the premises.  It was disappointing that the daughter did not give evidence or make a written statement.  Whilst the tenants claim that the Notice to Vacate was a retaliatory action on the part of the lessors, the Tribunal was convinced by the evidence of the lessors that the lessors genuinely believe their daughter intends to live in the premises.  The genuineness and apparent honesty of the lessor, Rosemary Hendry, was particularly convincing.  She stated the reason the lessors want their daughter to move into other premises was “personal tensions” in the lessors’ home. 

32Therefore, the Termination Notice dated 1 June 2006 was a valid termination notice under Clause 96 of the Standard Terms and the lessors were entitled to apply to this Tribunal for a termination and possession order based on that Notice.  Under section 47(1) of the Act the Tribunal has power to order the termination of the periodic tenancy as the tenants have not vacated the premises as required by the Termination Notice.   In fact, the Tribunal understands the tenants are still in possession. 

33Given the time since the Termination Notice was served (1 June 2006) and this determination, the Tribunal is satisfied under sub-section 47(2) of the Act that the tenants would suffer significant hardship if the termination and possession order were not suspended for 3 weeks to enable the tenants to find alternative accommodation and to vacate the premises, and that hardship would be greater than the hardship that would be suffered by the lessors if the order were suspended for three weeks and their daughter remain in the lessors’ home.  Therefore, the Tribunal will order the suspension of the order for the maximum of three weeks provided for under section 47(2) of the Act.

34As the Termination Notice was valid under Standard Term Clause 96, there was no need for the Tribunal to consider the other three “concerns” stated as grounds in the Termination Notice.  However the Tribunal notes that “sufficient particulars to identify the circumstances giving rise to the ground(s)” under Standard Term Clause 83(b) were not included in the “concerns” and that there was no prior Notice to Remedy given to the tenants in respect of the other three grounds as required under Standard Term Clause 93(a). 

Retaliatory action under Section 57

35Under section 57 of the Act the Tribunal must refuse a termination and possession order where:

oA lessor has applied for a termination and possession order under Part 4 of the Act (as in these proceedings

oThe tenants present evidence that satisfies the Tribunal that the tenants took reasonable action to secure or enforce their rights; and

oThe lessors do not present evidence that satisfies the Tribunal that the lessors were not so motivated. 

36The Termination Notice is dated 1 June2006 and RT 2079/06 was commenced by the lessors on 2 June 2006, so the lessors’ actions occurring prior to 2 June 2006 are relevant to their motives for commencing proceedings RT 06/2079. 

37In their Statement Contesting /Defending Application RT 06/2079 the tenants submitted that the lessors Application was made:

oAfter the tenants had informed the lessor Ian Hendry the tenants would be applying to the Tribunal for an order that the lessor not breach the terms of the tenancy agreement including by “unlawfully attempting to increase the rent”.

o   After the tenants had taken reasonable action to secure and enforce their rights as tenants, including by -

·     preventing the lessor from unlawfully removing tenants’ property from the premises, and

·     seeking legal advice in relation to their rights under the tenancy agreement, including in relation to the lessors’ proposed rent increases.

oProperty returned by lessor

38The tenants alleged there was certain property - a doona, a camera stand, a microwave oven and a hall table - on the premises which the lessor sought to remove on 30 May 2006.  The lessor stated in evidence that the items apparently belonged to previous tenants and had been stored in the roof cavity.  The lessor further said that when he told the tenant Sean Hutchens that he wanted to remove the “old junk” in the roof the tenant had said “Take the lot” and then had objected to the removal and insisted the lessor return the items from his car.  

39The tenant Sean Hutchens said in evidence the lessor had removed the property, some of which had been “gifted” by former tenants to the present tenants.  The tenants claimed there was a “dispute” between the lessor Ian Hendry and the tenant Sean Hutchens at that meeting and again on 31 May 2006 concerning the items of property the lessor sought to remove.  In relation to the property returned by the lessor, it is ingenuous to say there was a dispute that required the tenants to take reasonable action to enforce their rights concerning the property the lessor Ian Hendry sought to remove.  The action of the tenant Sean Hutchens requesting the lessor Ian Hendry to return the property Hendry was sufficient for the lessor Ian Hendry to return the property.  The Tribunal finds that this claimed ground under section 57(1) is not established by the tenants. 

oProperty not returned by lessor

40In relation to the property not returned by the lessor, including tins of paint and painting equipment, both the tenant Sean Hutchens and the lessor Ian Hendry claimed the property was theirs.  The lessor believed they were his either because he had reimbursed the tenant Sean Hutchens for the money spent in purchasing the items or that the lessor had left the items there for the tenants (and himself) to use in the painting being carried out.   There were at least two meetings or conversations concerning these items between the lessor Ian Hendry and the tenant Sean Hutchens on 30 and 31 May 2006.  The lessor stated that tenant Sean Hutchens took the items inside the premises and refused the lessor permission to enter the premises to retrieve the items. Again, the Tribunal finds the tenants argument, that the lessors’ issuing of the Notice to Vacate was in retaliation for the tenants’ action to enforce their rights, disingenuous.  The major disagreements between the lessor Ian Hendry and the tenant Sean Hutchens (including when the police became involved) was on 7 June 2006 after the lessors had issued the Notice to Vacate and after they had commenced these proceedings. 

41Under section 57(2) of the Act the lessor has to present evidence that satisfies the Tribunal that the lessors were not motivated by those actions of the tenant to apply for the termination and possession order.  Neither lessor stated in their written submissions or oral evidence that this was a reason for applying for the order.  It was not stated in either Application in RT 06/2079 or in the Statement Contenting/Defending RT 06/2118.  The reasons the lessors did given for applying for the order were those set out below.  The letter dated 7 September 2006 from the Welfare Rights & Legal Centre Limited [WRLC] does not say that the tenant Sean Hutchens sought advice in relation to such a ground for termination.  In the circumstances the Tribunal is satisfied with the evidence that the lessors presented as to their motivations that they were not motivated by the actions of the tenant Sean Hutchens to enforce his claimed rights to the tins of paint and painting equipment.  This claimed ground under section 57(1) is not established by the tenants. 

oAction to stop breach of lease

42The evidence of the parties about the meetings of 31 May and 1 June 2006 was continued to be inconsistent with each other at different stages during the hearings.  The lessor Ian Hendry gave evidence that at a meeting on 31 May 2006 he offered the tenants a 6 month lease at $300 per week.  The lessor also stated he indicated to the tenants that thereafter the rent would be $350 per week for a further 6 months and would increase thereafter to $400 per week.  The lessor stated he was not offering a second 6 month lease to the tenants as he understood the tenant Fabian Van Haeften intended to buy a property at the end of 2006 and both tenants would be vacating to live in the new property.  The additional information about the further two 6 month leases was information about the lessors’ future intentions for the property and was for the tenants’ information only.   The tenant Sean Hutchens said that the lessor Ian Hendry had agreed to a further fixed term lease for either 6 or 12 months at the same rental   The tenant tendered contemporaneous notes he had made at the request of the lessor which supported the lessor’s statement that he offered a further lease to end mid-December at $300 per week then a further 6 months at $350 per week to “the end of the year”.  

43Both the lessor Ian Hendry and the tenant Sean Hutchens gave evidence that the tenant Sean Hutchens refused what the lessor referred to as an “offer of a lease” and what the tenant Sean Hutchens referred to as a “rental increase”.  The lessor then stated he said to Sean Hutchens that he withdrew the offer.  The tenant Sean Hutchens gave evidence that the lessor then stated that he would issue a Notice to Terminate.  The lessor denied this.  The tenant Sean Hutchens’ contemporaneous notes have the words “resideration (?)” and “Alternative take to - Residential Tenancy Tribunal” after the notes concerning a further lease.  The Termination Notice was handed to both tenants at the meeting of all parties at the lessors’ home in the evening of 1 June 2006. 

44On 1 June 2006 Sean Hutchens stated he was seeking legal advice from Welfare Rights & Legal Centre Limited [WRLC] by telephone when the lessor visited the premises and interrupted that telephone conversation.  The tenant Sean Hutchens stated he informed the lessor that he was on the phone seeking legal advice on the tenants’ rights.  The tenant put down the phone and talked to the lessor.   The tenants presented a letter from the Supervising Solicitor of the WRLC dated 7 September 2006 (Exhibit “L”) in which the Supervising Solicitor confirmed that the WRLC records show that Sean Hutchens contacted the Tenants Advice service on “1 and 5 June 2006 seeking advice in relation to a tenancy dispute”.  The lessor Ian Hendry said that Sean Hutchens may have been seeking legal advice on the phone but he was not aware of it at that time.  The Tribunal is of the opinion that the lessor Ian Hendry was aware prior to issuing the Termination Notice that the tenant Sean Hutchens was seeking legal advice.  As a result, the Tribunal finds that the ground of Section 57(1)(iii) has been established by the tenants. 

45The Tribunal then has to enquire whether the lessors have satisfied it that their motivations for seeking a termination and possession order are not because the tenants took such reasonable action to secure or enforce their rights, particularly by seeking legal advice.  The Tribunal is of the opinion that, since the lessors were aware prior to 2 June 2006 that both tenants were lawyers and that the tenant Sean Hutchens was working or had worked as a volunteer worker at WRLC, the information that the tenant Sean Hutchens was seeking legal advice would not necessarily have had the same effect on the lessors as it would if the tenants had not been so qualified. 

46The lessor Ian Hendry gave evidence that, after his meeting with the tenant Sean Hutchens on 31 May 2006, he talked to his wife (the other lessor) that night about the lack of any lease (the lessors both said they believed there may not be a lease of the premises after the original tenant Robert Keca vacated the premises) and they decided to terminate the tenancy and seek vacant possession to allow their daughter to live there.  The lessor Ian Hendry called into the premises on 1 June 2006 and in evidence said that “communication with both tenants was not amicable” so he arranged for a meeting that night at which the lessors gave the Termination Notice to the tenants.  The lessors commenced the proceedings RT 06/2079 the next day.  The lessor Ian Hendry said that on 7 June 2006 the tenants delivered a signed “without prejudice” letter to the lessors that in essence stated the lessors should withdraw the Termination Notice or the tenants would take legal action.  Thereafter the lessors obtained legal advice on 15 June 2006 and amended their Application on 22 June 2006.

47The lessor Ian Hendry also mentioned in evidence the other “concerns” expressed on the Termination Notice as reasons for ending the tenancy of the two remaining tenants: the rental arrears; a dog on the premises contrary to the terms of the original tenancy agreement; there were tenants in the premises who were not on any lease agreement and that there may not be a tenancy agreement with those tenants; and the difficulties in obtaining agreement on any new tenancy with those tenants. 

48The lessor Rosemary Hendry said that she had not visited the premises since 2000 and had not talked to the tenants about any lease terms until she saw them at the evening meeting on 1 June 2006.  She had discussed the situation with Ian Hendry on 31 May 2006 and because a new tenant, Fabian Van Haeften had moved in “in good faith” in March 2006 she thought a further 6 months lease would be fair as she understood both tenants were going to leave at the end of 2006 when one of them bought a new house.  She had not agreed with Ian Hendry to anything else so he would not have offered other than a further 6 months lease at the increased rent. Also, the lessor Ian Hendry said he had been informed by the tenant Robert Keca that Robert moved out of the premises two weeks prior to the end of his notice to vacate as he was having difficulties with the tenant Sean Hutchens.  Robert Keca had paid rent until 28 May 2006.

49After consideration of all the oral and documentary evidence and submissions of the parties the Tribunal finds that the lessors have presented evidence that satisfies the Tribunal on the balance of probabilities the lessors were not motivated to issue the Termination Notice or to apply to this Tribunal for a termination and possession order by the tenants taking reasonable action to secure or enforce their rights.  The lessors were motivated by wanting to have their daughter move out of the family home and into the premises, by the difficulties that had arisen in the tenancy and by the difficulties in gaining agreement on a new lease to ensure there was a tenancy agreement between Sean Hutchens and Fabian Van Haeften (who were residing in the premises) and the lessors, there being none of the tenants named in the original tenancy agreement still residing in the premises. 

Rental reduction until work completed

50The tenants claimed that the lessor Ian Hendry and the tenant Sean Hutchens had agreed during their conversation on 31 May 2006 that the lessor would reduce the rent for the premises by the $80 per week being the proportion of the rent that the tenant Robert Keca had paid.  The rental reduction was to continue until the work was completed in mid-June 2006 or later as then a third tenant could move into Robert Keca’s room. 

51The lessor Ian Hendry denied he would have entered into such an open-ended arrangement.  The lessors in their written submissions dated 20 September 2006 submitted that, in light of the work taking much longer than they had expected, it would not be common business sense to enter into an agreement that placed control of finalising the works and paying full rent in the hands of the tenants. 

52After consideration of all the oral and documentary evidence and submissions of the parties the Tribunal finds that the lessors did not agree to the tenants paying a reduced rent until the tenants, or the tenant Sean Hutchens, completed the work and/or a third tenant moved into the premises thereafter. 

Rental arrears waiver for work undertaken

53The lessor, Ian Hendry, said in evidence that he did agree in late March early April 2006 that if  the tenant Sean Hutchens “repaired the cracks” in the internal walls of the premises, he would waive Sean Hutchen’s rental arrears of $1,080.  There was dispute about what work was to be undertaken and whether all the work had to be completed by the tenant Sean Hutchens for the waiver to take effect.  Also, was there a time limit for the work to be completed.

54The tenant Sean Hutchens stated in evidence that the agreement was for him (with some assistance from the other tenant Fabian Van Haeften and from the lessor Ian Hendry) to carry out “renovations” to the premises.  The lessor emphatically denied “renovations” were to be undertaken.  The lessor said the agreement was for the tenant Sean Hutchens to scrape out the more major cracks, fill them with cement render, then plaster and sand back the repair and he, Ian Hendry, would paint the walls.  The lessor thought that a reasonable worker would take about 5 - 10 days to do the repairs working from about 8.00am to 4.30pm.  The work involved about 1 day to scrape out the cracks, 1 day to cement fill, 1 day to plaster and 1 day to sand back, with drying time between those days.  

55The tenant Sean Hutchens said in evidence that he understood the work was to undertake renovations to the premises including repairing the cracks in the internal walls as above, painting them together with preparing and painting the ceilings and woodwork in each room.  Thus there was substantial and significant different understanding of the amount of work to be undertaken and how long it would take. 

56The Tribunal is aware that the lessor Ian Hendry observed the work being undertaken and the standard of that work when he worked inside the premises assisting with the work, and outside in the garden on other repairs and maintenance, for significant periods between late March/early April and 31 May 2006.  There was no evidence that any objection had been made by the lessor to the tenants during that period concerning the amount and/or standard of work being undertaken by the tenants, principally Sean Hutchens.

57Whilst there is still work to be completed repairing cracks and painting the walls in the main bedroom (the bedroom Robert Keca occupied) and the kitchen, there has been substantial and significant work completed to a reasonable standard as evidenced by the photographs tendered by the tenants.  The work was carried out principally by the tenant Sean Hutchens with some assistance from both the tenant Fabian Van Haeften and the lessor Ian Hendry.  Given the confusion surrounding all the informal agreements between the lessors and the tenants in relation to these premises and the fact that the lessors deducted the rental arrears of $1,080 from the rental account table presented in evidence, the Tribunal finds that the work to be carried and out completed by the tenant Sean Hutchens has been undertaken such that his rental arrears of $1,080 are to be waived by the lessors under the agreement between the lessor Ian Hendry and the tenant Sean Hutchens.

Amount of Tenants’ Rental Arrears

58In their written submissions dated 20 September 2006 the lessors submitted that the tenant Sean Hutchens has paid only $950 in rent during the period January to September 2006 as follows:

April    13                   $180

27                   $ 50
May     26                   $180
June     16                   $180
August 16                   $360

TOTAL           $950

59The lessors acknowledged at the hearing that the tenant Sean Hutchens paid $130 for materials he bought and used on the work he undertook, which together with $1,080 waived rental arrears means he needs to be credited with $2,160 paid in rent for the period 1 January to 30 September 2006.   The rent credited by the lessors needs to be deducted from the outstanding rent to calculate the outstanding rental arrears for the tenant Sean Hutchens payable by the tenants under the terms of the periodic tenancy.  A further hearing before the Tribunal is needed for the lessors and tenants to provide specific details of the rental payments to the date the tenants vacate to enable the Tribunal to calculate the precise rental arrears at that date.  

60Also, the tenants claimed that the lessor Ian Hendry agreed with the tenant Sean Hutchens on 31 May 2006 that the lessor would waive the payment of that part of the rent that was paid by the original tenant Robert Keca up to 28 May 2006 until the work was finished (then expected to be in mid-June 2006) or later and a new tenant was found.   As a result, the present tenants have not paid any of this share of the rent since 28 May 2006.   The lessor Ian Hendry denied that such an agreement had been entered into by him.  His grounds for that denial were those set out in the last sub-paragraph of paragraph 25 above in relation to a new tenancy agreement not commencing until those conditions were met.  The lessor Rosemary Hendry also stated she was not aware of any such an agreement.  The Tribunal is not convinced that the lessors did agree to such an open-ended rental reduction.

61The outstanding rent for this share is to be calculated from 29 May 2006 to the date the present tenants vacate.  Again, a further hearing before the Tribunal is needed for the lessors and tenants to provide specific details of the rental payments to the date the tenants vacate to enable the Tribunal to calculate the precise rental arrears at that date.  

Rental reduction under section 71 of the Act

62The tenants sought a reduction in rent under section 71 of the Act for:

·     The current state of the premises

·     Diminished use and enjoyment of the premises whilst the work was undertaken

·     Diminished use and enjoyment of the premises whilst repairs, both urgent and non-urgent, were not carried out by the lessor.

The Tribunal will deal with each of the above grounds for the rental reduction claim in turn, noting that each of these grounds for remedy are mirrored in the tenants compensation claims that are dealt with below.

63Section 71 of the Act provides:

(1)On application by a tenant, the tribunal shall order a reduction in the rental rate payable under a residential tenancy agreement if it considers that the tenant’s use or enjoyment of the premises has diminished significantly as a result of any of the following:

(a)    the loss or diminished utility of an appliance, furniture, a facility or a service supplied by the lessor with the premises as a result of  -

(i)the withdrawal of the appliance, furniture, facility or service by the lessor; or

(ii)the failure by the lessor to maintain the premises and any appliance, furniture or facility supplied with the premises in a reasonable state of repair, having regard to their condition at the commencement of the residential tenancy agreement; or

(iii)the failure by the lessor to provide and maintain such locks or other security devices as are necessary to ensure the premises are reasonably secure;

(b)    the loss of use of all or part of the premises; or

(c)    …..

(2)A reduction in the rental rate ordered under subsection (1) shall -

(a) take effect from the day on which the tenant’s use or enjoyment of the p[remises diminished or such later date as the tribunal specifies; and

(b) remain in force for such period, not exceeding 12 months, as is specified by the tribunal.            

64The effect of section 71 was considered by the Full Federal Court in Worrall v. Commissioner for Housing[2002] FCAFC 127 (Worrall) at paragraph 54 where the Court cited, with approval, paragraph 486 of the Community Law Reform Committee Report (the Report) and stated that s. 71 carried into effect the intention expressed in the Report.    The Report recommended that the Tribunal have power to award compensation for property or financial loss and to order a reduction in rent for the loss of value of facilities to the tenant due to their withdrawal by the lessor or through failure on the part of the lessor to repair.  The Report said the order could be retrospective and to continue until the lessor repairs or restores the facilities “or earlier as the Tribunal considers appropriate.”

65The Explanatory Memorandum to the Residential Tenancies Act 1997 stated that the rent reduction should encompass the entire period of breach even where there have technically been a number of separate breaches, rather than a single, continuing breach. It is clear that both the Committee and the Legislature intended that the Tribunal should have the ability to impose a rent reduction which spans the entire period of the breach, from the lessor's initial failure to make repairs or the withdrawal of facilities until the lessors have fully met their obligations.

66Also, the tenants have a duty to mitigate their losses under section 38 of the Act: including by notifying the lessor of the need for repairs, by not obstructing the lessor carrying out the repairs after the notification, and by not delaying seeking orders from the Tribunal to the point where the lessor is disadvantaged by the delay.   The Tribunal will consider the issue of mitigation after it has decided whether the tenants have established on the balance of probabilities that the lessor acted to fail to repair or to withdraw facilities such that there be a rental rate reduction, noting that in Fenton, Neist and Baker v. de Andrade [1999]ACTRTT 21 and Watson v. Douglas & Xavier [1999]ACTRTT23 the Tribunal said:

“…. a tenant who permits defects to continue for eleven months, even with constant reminders, is likely to have failed to mitigate their own loss.

67The Tribunal notes that this part of the tenants’ claim is dealt with as a claim for a reduction in the overall weekly rent, not a claim for separate reductions for each tenant’s share of the weekly rent.  The tenancy being a period tenancy subsequent to a fixed tenancy the tenants are jointly and severally liable for the whole of the weekly rent.  The Tribunal will not apportion any rental reduction on between the tenants.

·Current state of the premises

68The Tribunal does not accept that section 71 is applicable in the circumstances where the current state of the premises, other that the lack of repair dealt with under the third section of this part of the tenants’ claim, was caused principally by the actions of the tenants themselves in requesting the lessors to agree to the work being undertaken and in requesting the lessor to remove the carpets.  The work was undertaken at the tenants’ own request, choice and agreement (even if the quantity and quality of the work to be done and carried out was in dispute).    The tenants have been awarded compensation for the work undertaken under section 104(l) of the Act (see below).  The Tribunal does not accept that the tenants are entitled to compensation under this claimed head.

·Loss of use of all or part of the premises whilst the work was undertaken by tenants

69This part of the tenants claim is based on the claim by the tenant Sean Hutchens that he and the lessor Ian Hendry agreed at their meeting in late March/early April 2006 that the tenants, particularly Sean Hutchens would carry out “renovations” to the premises in return for the lessor waiving his outstanding rent of $1,080 together with rebating rent until the works were completed.  As noted above, there is strong contention about the extent of the work and the standard of work agreed to be undertaken by the tenant. 

70The argument was that this agreement, which was to benefit the tenants, particularly Sean Hutchens and which was at the request of the tenant Sean Hutchens, resulted in a “loss of use of all or part of the premises” such that it would ground a rental rate reduction.  The Tribunal does not accept that section 71 is applicable in the circumstances as the loss of use was at the tenants’ own request, choice and agreement.  

71The Tribunal has dealt below with the claim under section 104 of the Act for loss of use and enjoyment whilst the work was undertaken.  The Act should not be interpreted to give compensation and a rental rate deduction for the same circumstances.  These remedies are enacted as alternative remedies (See Greenhill v ACT Housing [2004] ACTRTT 7), therefore the Tribunal will not award any rental rate reduction under this claimed head.

·    Whilst repairs not carried out by lessor

72The landlord’s duty to repair premises is to be found in standard terms 54-57 of the Act Those .  terms read:

55. (1)   The lessor shall maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the Tenancy Agreement.  The tenant shall notify the lessor of any need for repairs.

57.          Subject to clause 55, the lessor shall make repairs, other than urgent repairs, within 4 weeks of being notified of the need for the repairs (unless otherwise agreed).

73The lessors’ duty to carry out urgent repairs is to be found in standard terms 59 and 60 of the Act.   Clause 60 defines what urgent repairs are and includes a blocked or broken lavatory system and a dangerous electrical fault.   Clause  59 provides:

The tenant must notify the lessor (or the lessor’s nominee) of the need for urgent repairs as soon as practicable, and the lessor must, subject to clause 82 (providing for the lessor to give reasonable notice to enter the premises to carry out the repairs at a reasonable time) carry out those repairs as soon as necessary, having regard to the nature of the problems. 

74These provisions impose a mandatory duty on the lessors to carry out urgent repairs and to maintain the premises during the tenancy in a reasonable state of repair.  It is not a defence to any landlord that reasonable steps were taken to rectify a defect and/or to repair.  The test is whether defects or repairs were in fact remedied so as to leave the premises in a reasonable state of repair having regard to their condition at the start of the tenancy in 2000.  Also, there cannot be a withdrawal of services or facilities which the landlord was under no duty to provide.  The lessors’ duty to repair arises only when the tenants put the lessors on notice of the need for the repairs.  (Anforth, Thawley and Christensen Residential Tenancies Law and Practice in NSW at [2.47.0]).  This approach to the application of standard terms 55 and 57 is consistent with the common law of contract which does not recognise “best efforts” or a “reasonable attempt” as a substitute for the exact performance required under contracts (Cheshire and Fifoot “Law of Contracts in Australia” 7^th ed at [9.2]).

75The following table is a list of the various items in contention between the tenants and lessors in relation to this part of the remedies the tenants seek.  It sets out the individual items the tenants plead were notified to the lessors and for which the lessors breached their duty to repair. 

Items	Tenants’ Submissions	Lessor’s Submissions
Kitchen stove	Only the hot plates worked: the grill and oven did not.   Former tenants notified lessors in 2003.  The tenant Sean Hutchens said he notified the lessor Ian Hendry in December 2005 and the lessor agreed to replace the stove.  The tenant Sean Hutchens said he then discussed this with lessor Ian Hutchens on “numerous occasions”.	Replaced on 6 June 2006 with an electric stove.
Broken windows and fly screens	In late March/early April 2006 the tenant Sean Hutchens notified landlord of these broken items and it was agreed lessor would supply glass and fly screen material which the tenants were to install	Lessor stated windows and fly screen were broken by tenants; lessor agreed to supply glass cut to size and the fly screen material and did so at an unspecified time
Carpets	The tenant Sean Hutchens stated he agreed with the lessor Ian Hendry in late March/early April 2006 for the carpets to be replaced in the bedrooms as well as for the removal of the carpets and the repair, sanding and staining of the floorboards in the entry hall and the lounge.  The carpets were removed from hallway and loungeroom in April 2006 and from the third bedroom in mid-May 2006.  These carpets were cleaned and returned to the front verandah.	The lessor Ian Hendry stated he did not agree to replace carpets as the tenant Sean Hutchens had a dog that “tramped through the house”.  He said he had told Sean Hutchens he would replace the carpets sometime but not immediately. The lessor said the carpets from the hall, lounge and one bedroom were removed, cleaned and returned to the front verandah of the premises.  The carpets have not been relaid, partly because of the difficulties of gaining access to the premises since 7 June 2006.
Water leak from  bathroom	The tenant Sean Hutchens raised this need for improvements in his meeting with the lessor Ian Hendry in December 2005.  The tenant Sean Hutchens stated he agreed with the lessor Ian Hendry in late March/early April 2006 for the repair of the leak.	The lessor Ian Hendry said a qualified plumber had inspected the bathroom leak but was unable to find a cause/source.
Water leak in  Kitchen	The tenant Sean Hutchens raised this need for improvements in his meeting with the lessor Ian Hendry in December 2005.  The tenant Sean Hutchens stated he agreed with the lessor Ian Hendry in late March/early April 2006 for the replacement of the leaking tap in the kitchen and resealing the kitchen sink.  The tenant said the lessor agreed subsequently to replace the bench and cupboard shelf underneath.  The tenants said there are additional water leaks as a result of the installation of the stove on 6 June 2006.	The lessor Ian Hendry stated he organised for the kitchen bench to be measured and installed but he had to cancel after the tenant Sean Hutchens refused to allow entry into the premises to the lessor and tradesmen on 7 June 2006.
Sewerage blockage	The tenant Sean Hutchens raised this need for improvements in his meeting with the lessor Ian Hendry in December 2005.  The tenant Sean Hutchens stated he agreed with the lessor Ian Hendry in late March/early April 2006 for the replacement of the sewerage pipes in the backyard as they were known to require replacement and had been subject to subject to blockages.	The lessor Ian Hendry said that the sewer line was cleared towards the end of 2005.  The toilet has not blocked since to his knowledge.  He also organised for a licensed plumber to replace the sewer line in May 2006. This was completed.
Non-working/ dangerous lights and power points	The tenant Sean Hutchens raised this need for improvements in his meeting with the lessor Ian Hendry in December 2005.  One of the photographs tendered showed a power point handing loose on a wall. There were faulty lights and power point in the master bedroom and other power points in the second bedroom, lounge room and kitchen.	The lessor Ian Hendry said he told the tenant Sean Hutchens that the light in his bedroom could be fixed when the electrician installed the stove in June 2006.  Both the tenant and the lessor forgot to ask the electrician to fix the light during the two ½ days the electrician was there.
Cracked walls and paint work	Wall cracks needed repairing and repainting.  Agreement with lessor Ian Hendry for tenants to undertake the work with assistance of lessor.  Work started after late March/early April meeting and not finished by 1 June when lessor gave Termination Notice.  Still not completed.	Agreed to tenants doing about 5-10 days work for tenant Sean Hutchens to “work off” his $1.080arrears in rent.  Rent was lowest in area and based on house being old and in shabby condition.

76From the above table it can be seen that the majority of the outstanding repairs were notified to the lessor Ian Hendry by the tenant Sean Hutchens during their meetings in December 2005 and again in late March/early April 2006.   The Tribunal finds that from late December 2005 to 7 June 2006 when the tenants refused the lessors (and tradesmen) permission to enter the premises to carry out repairs (unless written application was made) there was a breach of the lessors’ duty to repair and to carry out urgent repairs such that the tenants are entitled to a rental rate reduction for the whole of that period. 

77The Tribunal notes that the sewerage was not an urgent repair during this period as the blockage to the toilet had been remedied by 6 December 2005 (the date of the lessors’ receipt for the work) and the lessors’ evidence was that there had not been any blockages notified in 2006.   The water leaks had been in existence for a number of months prior to the notification in late December 2005, as had the loose electric light and electric plugs.  The Tribunal notes that the lessor Ian Hendry’s efforts in engaging licensed plumber/s to seek the cause/source of the leak in the bathroom had not been successful.  Thus in some respects the lessors’ efforts to carry out the urgent and non-urgent repairs do not satisfy the lessors’ duty to repair under clause 55 and 59 of the Standard Terms. 

78The Tribunal considers that a rental rate reduction of $40 per week under section 71 of the Act for the period from the mid-December 2005 notifications until 6 June 2006, being a total of approximately 22 weeks, is appropriate in the circumstances of all the breaches listed above.    Therefore, the total rental reduction awarded under this part of the tenants’ claim is $880.  In coming to this determination the Tribunal has taken into account:

· The Explanatory Memorandum to the Residential Tenancies Act 1997 which stated that the rent reduction should encompass the entire period of breach even where there have technically been a number of separate breaches, rather than a single, continuing breach;

·     That the lessors’ breaches of their duty to repair did not cause a similar significant diminution of the tenants’ enjoyment nor such a serious loss of use of parts of the premises as the circumstances on which the Tribunal based rental rate reductions in other cases before the Tribunal (See Jane Skea v Janes Lindley [2005] ACTRTT 1256; Greenhill v ACT Housing [2004] ACTRTT 7); and  

·     The duty of the tenants to mitigate under section 38 of the Act has not been fulfilled by the tenants.  The tenants could have engaged tradesmen to carry out the urgent and non-urgent repairs and then sought reimbursement from the lessors for the costs.  The tenants could have applied to this Tribunal for an order to the lessors to carryout the repairs. The tenants did none of these and the fact that the tenants refused the lessor and tradesmen permission to enter the premises without written application after 7 June 2006 made it harder for the lessor to carry out their duty to repair. 

79As a result of all the above the Tribunal awards the tenants a rental rate reduction under section 71 of the Act of $880.

Compensation under section 104 of the Act

80The tenants sought compensation from the lessors under section 104 of the Residential Tenancies Act 1996 (ACT) on various grounds which the Tribunal will deal with in turn.  The grounds for the claimed compensation are:

·Diminished use and enjoyment of the premises whilst the work was undertaken;

·Diminished use and enjoyment of the premises  whilst repairs, both urgent and non-urgent, were not carried out by the lessor;

·The work the tenants Sean Hutchens and Fabian Van Haeften completed if the Tribunal determines there is not a fixed tenancy and if the rental arrears are not to be waived: this compensation is sought to be paid to each of the tenants proportionate to the work they undertook;

·Value of tenants’ possessions removed by the lessor, Ian Hendry, from the premises without the consent of the tenants. The property in dispute included 4-5 cans of paint and curtains (the lessor claimed were his property) and items of painting equipment.

Diminished use and enjoyment whilst the work undertaken

81The tenants were not awarded a rental rate reduction under section 71 of the Act for their diminished use of and enjoyment of the premises whilst the work was undertaken, however, as an award of compensation under section 104 (l) of the Act is made in paragraph below and as the tenant Sean Hutchens has received waiver of his rental arrears for the work undertaken, the Tribunal is of the opinion that any further compensation relating to the work undertaken by the tenants would be “double dipping”.  Therefore, the Tribunal will not order any compensation to be paid by the lessors under this head. 

Diminished use and enjoyment whilst repairs, urgent and non-urgent were not carried out

82As the tenants have been awarded a rental rate reduction under section 71 of the Act for their diminished use of and enjoyment of the premises as a result of the failure of the lessor to undertake within four weeks repairs of which the tenants had given notice, an award of compensation under section 104 of the Act for this claimed basis for compensation would be a duplication of that rental reduction.   The Act should not be so interpreted to give compensation and a rental rate deduction for the same circumstances.   These remedies are enacted as alternative remedies (See Greenhill v ACT Housing [2004] ACTRTT 7), therefore the Tribunal is not awarding any compensation to be paid by the lessors under this head.

Compensation for the work undertaken by the tenants

86. The Tribunal will consider the claim for compensation for the work undertaken by the tenants under section 104 (l) which provides that the Tribunal may, in addition to any other order it is empowered to make, make “any other order the tribunal considers appropriate”.  Since the rental arrears of the tenant Sean Hutchens have been ordered to be deducted by the lessor from the total amount owing for arrears of rent under the agreement between them, the Tribunal will take that into account in considering this part of the tenants’ claim. 

87. As stated previously, the work undertaken by the tenants with some assistance from the lessor Ian Hendry, commenced after the meeting between the lessor Ian Hendry and the tenant Sean Hutchens in late March/early April 2006.  Thereafter, substantial work on the premises was undertaken by the tenant Sean Hutchens with some assistance from the other tenant, Fabian Van Haeften.

88. The quality and quantity of the work undertaken is listed on page 9 of the Tenants’ Submissions – Final Case Summation received by the Tribunal on 18 September 2006.  He set out the work undertaken as:

“..In this particular case the house is built on old and poor foundations situated on clay.  It has moved significantly, and will continue to do so, as evidenced by the extent of the cracking in the internal render/plaster walls and outside brickwork  A proper cement render mix was used because of the significant damaged 9sic) caused to the areas showing the movement.  By using a strong mix, the expected future movement along these “fault” lines would be limited.  If a weaker mix had been used, new cracks could be expected to open up in the same areas sooner rather than later.  Whilst future movement cannot be avoided, the extent of the resultant cracking can be.

I also note that I have worked in the construction and landscaping industries on and off for almost 20 years, and specifically have worked as a painter, cement rendered and plasterer.  …

… in each of the rooms up to three coats of plaster has been required, given the extent of the repairs and thickness of plaster require. That is, a base coat of plaster taking up to 48 hrs to dry.  Then a topping coat, taking up to 24 hrs to dry.  Then a sand and a final skim  coat of toping compound as necessary, before any final sanding.  The painting of walls and ceiling (2 coats of acrylic each, with a minimum of 4 to 8 hrs between each coat), and of woodwork (1 coat primer and a final coat in oil, taking up to 24 hrs to dry).” 

89. The tenant Sean Hutchens carried out most of the work repairing the cracks in various internal walls as well as the preparation and painting of walls, ceilings and woodwork.  On page 5 of the tenants’ Final Case Summation the tenants estimate that the work carried out by the tenants to be worth from $10.000 to $15,000 and up to $18,000.

90. The lessor Ian Hendry stated that he agreed the tenant Sean Hutchens was to repair the cracks in the internal walls and he, the lessor, was to paint the walls after the cracks were repaired.    The lessor said that by 2 June 2006 he had painted the following:

i.   Bathroom – the tenant Sean Hutchens did not like the finish and repainted

ii.   Bedroom 2 –two coats – the tenant Sean Hutchens painted a third coat without any discussion with the lessor

iii.   Bedroom 3 – three coats – the tenant Sean Hutchens painted a further coat of a different colour

iv.   Laundry – two coats

v.   Enclosed back verandah – two coats

vi.   Hallway – one coat

vii.Lounge room – one coat –

viii.Many of doors, architraves and some windows – at least one coat

91. The lessor Ian Hendry further said he did not feel the ceilings needed painting but the tenant Sean Hutchens disagreed and painted the ceilings in the lounge room.  The lessor said he “capitulated to his pressure” and painted the ceiling in the hallway.   The approach taken by the lessor goes some way to explaining the confusion between the parties concerning what actual work was agreed to be done, the quality of the work to be undertaken and the length of time it would take to complete. 

92. There was no other evidence that the lessors objected to the work that was being undertaken by the tenants during the period up to 31 May 2006 and that they objected to the standard of work being undertaken despite the lessor Ian Hendry being frequently at the premises undertaking the painting above described and assisting with the laying of the sewerage pipes in the back garden and carrying out maintenance work on the garden.   There was evidence that the tenant Sean Hutchens was dissatisfied with the lessor’s standard of painting and repainted some of it.  

93. The Tribunal finds that the tenants carried out more work of a higher standard than the lessor Ian Hendry either agreed to or expected in late March/early April 2006 in return for the waiver of rental arrears of Sean Hutchens.  The Tribunal also finds that the lessors now have the benefit of the considerable work that was carried out to the premises by the tenants.   The lessor, having gained the advantage of that work, will be able to charge a significantly higher rental should they wish to rent the premises in future if and when their daughter moves out of the premises. 

94. In Tenants’ Submissions – Final Case Summation received by the Tribunal on 18 September 2006 the tenants estimated the value of the work undertaken to be from $10.000 to $18,000.  The tenant Sean Hutchens obtained three quotes (attached to the Tenants Statement of Issues – Tenants’ Case, in RT 2118/06) in late July 2006 to finish the repairs/renovations to Bedroom 1 and Kitchen – the two rooms not already repaired/renovated by the tenants.  The quotes were for rendering the walls together with preparing the walls, ceilings and woodwork for painting and then painting all surfaces.   The three quotes were:

Canberra Painting Services dated 31 July 2006 in the total amount of $3,518.00
                 Peter Painter dated 22 July 2006 in the total amount of $5,000
                 Tiny’s dated 22 July 2006 in the total sum of $5,400

95. Given all those circumstances and taking into account that the tenants have gained the advantage of the waiver of rental arrears of $1,080 through undertaking the work, the Tribunal finds that the lessor should pay the tenants compensation under section 104(l) of the Act for the benefits the lessors have gained from the work undertaken.   The Tribunal finds that the tenants have estimated the value of the work undertaken at a high rate, even given the three quotes obtained for the repairs/renovations to the remaining two rooms and the tenant Sean Hutchens’ stated experience in the construction industry.  Thee quotes are based on commercial rates which was not the basis of the work being undertaken and not the basis on which the Tribunal will compensate the tenants in the circumstances of this case.  Also, the lessor did assist with some of the work as indicated above, even if the tenant Sean Hutchens did not accept the standard of the lessor’s work and re-did some of it.

96. Taking all the circumstances into account, the Tribunal has determined that the lessor should pay the tenants compensation of $1,500 under section 104(l) of the Act.  Firstly, the compensation is to be deducted from any rental arrears the tenants may owe at the date they vacate the premises and, secondly, any balance not so deducted is to be paid by the lessors to the tenants jointly.  It is for the tenants to reach agreement between themselves how they apportion the compensation as the Tribunal does not have sufficient evidence before it to determine this issue.

Tenants’ possessions removed

97. The property in dispute included “2 paint trays, a paint roller, a paint brush, various pieces of sandpaper, two tubes of gap filler and two paint scrapers”.   Both the lessor and the tenant Sean Hutchens claim these were their property.  Various items have been returned by the lessor and there was no specific evidence on which items are still claimed to have been taken and not returned to the tenants.  The Tribunal notes that the lessor agreed to credit an amount of $130 to the overdue rent of the tenant Sean Hutchens in respect of materials the tenant bought to use in undertaking the work.  In the circumstances, the Tribunal does not have sufficient evidence before it to determine this issue. 

ORDERS

1.That the Residential Tenancy Agreement is terminated and possession of the premises is to be given to the lessors at 5pm on 31 October 2006.

2. That the Deputy Registrar is to issue a warrant for eviction for the above premises.

3.That Order 2 above is suspended for a period of 21days.

4.That the tenants are to remove all goods and return the premises in a clean condition by 5pm on the 21 November 2006.

5.That any goods belonging to the tenants remaining on the premises after the date that vacant possession is given will be deemed uncollected goods and the Uncollected Goods Act applies to their storage and disposal.

6.That the tenants shall pay the lessors an occupation fee at the rate of $35.71 per day from 31 October 2006 until the date that vacant possession is given.

7.Leave is given to either party to re-list both matters on 14 days written notice after the date the tenants vacate the premises for the Tribunal to consider and determine, subject to the Tribunal’s findings set out in paragraphs 58 to 61of the attached Statement of Reasons, the amount of rent outstanding and payable at the date of vacation by the tenants to the lessors.

8.The tenants shall be credited with a rental rate reduction of $40 per week under section 71 of the Act for the period from the mid-December 2005 until 6 June 2006, being a total of 22 weeks, in the total sum of $880.

9.The lessors are to pay the tenants compensation of $1,500 under section 104(l) of the Act for the work actually carried out on the premises.

10.The compensation of $1,500 is, firstly, to be deducted from any rental arrears the tenants may owe at the date they vacate the premises and secondly, any of the compensation not so deducted is to be paid by the lessors to the tenants jointly.  The tenants are to agree between themselves how to apportion the compensation so paid.

Jennifer David

Member

1 November 2006