Jakaj v Roberts & Anor; Kekalainen & Anor (Residential Tenancies) - [2024] ACAT 90

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

JAKAJ v ROBERTS & ANOR; KEKALAINEN & ANOR (Residential Tenancies) [2024] ACAT 90

RT 846/2024 and RT 879/2024

Catchwords: RESIDENTIAL TENANCIES – whether urgent repairs were needed and for what period of the tenancy – whether rental premises are “not fit for habitation” – need for tenant notification to engage a lessor’s obligation to repair – compensation to tenant for unusable kitchen, ensuite toilet, lack of proper facilities including lighting in main bedroom and five other areas of house, laundry only partly useable, water pump leaks

Legislation cited: Residential Tenancies Act 1997 ss 19A, 19B, 25, 83(d), 83(m); standard terms 55–57, 60, 86, 87

Cases cited:Bannister v Cheung [2014] NSWCATCD 105
Brogan Prestige Properties v Strand & Black (Residential Tenancies) [2010] ACAT 60
Cope & McEachern v Walker & Walker (Residential Tenancies) [2018] ACAT 65
Finn v Finato [2004] NSWCTTT 179
Halcombe v Hitchman (Residential Tenancies) [2018] ACAT 5
Mathew & Anor v Barranco (Residential Tenancies) [2016] ACAT 102
McLeish v FT Eastment & Sons Pty Ltd (1970) 91 WN (NSW) 268 CA
Proudfoot v Hart (1890) 25 QBD 42

Tribunal:Member M Hanna

Date of Orders:  29 November 2024
Date of Reasons for Decision:      29 November 2024
Date of Publication:  6 December 2024
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          RT 846/2024

BETWEEN:
PAUL JAKAJ
Applicant/Lessor

AND:
JENNA AMY ROBERTS
First Respondent/Tenant
JACOB KYLE KEKALAINEN

Second Respondent/Tenant
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 879/2024
BETWEEN:
PAUL JAKAJ
Applicant/Lessor

AND:
JACOB KEKALAINEN
First Respondent/Tenant
JENNA ROBERTS

Second Respondent/Tenant

TRIBUNAL:Member M Hanna
DATE:29 November 2024

ORDER

The Tribunal orders that:

The Office of Rental Bonds release to the applicant the sum of $1,142.85 of the bond held in dispute and the remainder ($1,857.15) be released to the respondents.
The application in RT 846/2024 is otherwise dismissed.
………………………………..
Member M Hanna

REASONS FOR DECISION

In the matter of RT 846/2024, it is an application in relation to the residential tenancy claims. In the matter of RT 879/2024, it is an application in relation to the rental bond. Both applications are lodged by the lessor, Mr Paul Jakaj (the applicant). Ms Jenna Roberts (first respondent) and Mr Jacob Kekalainen (second respondent) are the tenants in both applications. The matters are heard together on 8 November 2024.
On 22 March 2023, the respondents leased a residential property in Macgregor, ACT, from the applicant, for a fixed term of 52 weeks commencing on 28 March 2024 to 28 March 2025. The rent was $750 per week. The applicants paid a bond of $3,000 to the Office of Rental Bonds, the whole of which is now held in dispute.
It is noted that the lease was incorrectly dated in two places (as commencing in 2023). Neither party however disputes that the intention and fact was that the term of the lease commenced on 28 March 2024 to end 52 weeks later and that the tenants actually entered the premises on 29 March 2024 after delays at the lessor’s end. The other agreed date is that the respondents left the property on 22 August 2024.
On 29 March 2024, the first day of occupation, the respondent tenants notified the applicant that a swarm of bees was on the property they occupied the property and required urgent attention due to safety concerns.
On 4 April 2024, the tenants notified the lessor that a series of urgent repairs were needed. They also responded on the evening of 4 April 2024 to the ingoing property report, disputing the stated condition of almost every entry on the report, noting both serious defects needing urgent repair, other defects and issues of cleanliness and mould. The respondents submitted, and the Tribunal accepts, that from 4 April 2024, urgent serious repairs were required and that they notified the lessor’s agents of the defects requiring repairs.
Amongst the urgent issues raised by the tenants upon entry into the property were the following:
(a)The kitchen sink was blocked and unusable.
(b)The cooktop was not functioning.
(c)There was no hot water coming through the kitchen tap.
(d)The ensuite toilet was blocked and effectively unworkable.
(e)The toilet seat had a broken hinge and could not be sat on.
(f)The shower door was defective and difficult to open.
(g)The outdoor water pump leaked significant amount of water when on.
(h)The laundry was unusable as there was an uncovered spout coming out of the sink and there was nowhere to connect a washing machine.
(i)Six lights in different parts of the house did not work including the master bedroom, the kitchen light, the hallway, the kitchen nearest the sink and the backdoor.
Clauses 55–57 of the standard residential tenancy terms — contained in schedule 1 to the Residential Tenancies Act 1997 (the RT Act) — set out the statutory structure that governed the respondents’ obligation to maintain the premises in a reasonable state of repair:
Lessor to make repairs
55   (1)     The lessor must maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the tenancy agreement.
(2)     The tenant must notify the lessor of any need for repairs.
(3)     This section does not require the tenant to notify the lessor about anything that an ordinary tenant would reasonably be expected to do, for example, changing a light globe or a fuse.
56            The lessor is not obliged to repair damage caused by the negligence or wilful act of the tenant.
57            Subject to clause 55, the lessor must make repairs, other than urgent repairs, within 4 weeks of being notified of the need for the repairs (unless otherwise agreed).
Urgent repairs are described in standard term 60 and include a fault or damage that causes the residential premises to be unsafe or insecure.
I draw attention also to Brogan Prestige Properties v Strand & Black,[1] cited with approval in Halcombe v Hitchman,[2] in which the Tribunal said:
a lessor’s obligation to repair under standard residential tenancy terms 54 and 55 is framed in mandatory terms, i.e., the lessor “shall” maintain the premises in a reasonable state of repair. It is therefore not a defence to any landlord to plead that reasonable steps were taken to rectify either patent or latent defects. The test is whether these defects were in fact remedied such as to maintain the premises in a reasonable state of repair.
[1] Brogan Prestige Properties v Strand & Black [2010] ACAT 60
[2] Halcombe v Hitchman [2018] ACAT 5 at [48]
Both parties disputed issues related to the access to the property and the extent of the repairs needed to the property. There was evidence heard from both sides in relation to the number of requests for repairs, whether access existed to enter and repair and what was actually done to repair the issues reported. It was the applicant’s submission hat the respondent tenants failed to give access to the property. The Tribunal finds that access was only difficult in the last six weeks of the tenancy.
The Tribunal established that many of the repairs the respondents claimed were factually urgent and necessary resulting in, for example, a non-operative kitchen, ensuite bathroom toilet, a master bedroom that was dark after sunset, a laundry that was only partially useable.
The Tribunal heard the respondents did make the property available for inspection and repair on a number of occasions and that on one occasion the lessor himself attended, though he did not identify himself to the respondents. Despite this, the repairs did not occur.
After oral evidence from one of the applicant’s agents and the second respondent, it was established that on Wednesday, 5 June 2024, an agent of the lessor, Drew Sprout, attended the property and was personally shown all the unrepaired issues. That the applicant’s agent had no record of this visit, despite having arranged this visit, and no report from Drew Sprout, is anomalous but irrelevant to the fact that the inspection did indeed occur and should have resulted in repairs occurring consequent.
The requested repairs were not completed, and those started, never concluded. This was still the case when the tenants left the property on 22 August 2024 after being served two notices to remedy on 12 July and 19 July 2024 and ultimately a notice of termination on 19 July at which point the respondents owed a total of $7,550 in rent.
The respondent ceased paying rent from 21 June 2024. Initially they justified this on significant hardship (reported to the applicant) caused by an accident to Mr Kekalainen after he fell into a hole which the evidence indicates was caused by a loose drainage cover on the drive, loose after a repair was started by the applicant. This accident led to the second respondent, who was self-employed, not being able to work or earn money for three – four weeks. The respondents communicated this issue to the lessor’s agents and requested significant hardship be taken into account while he recovered.
In the intervening period until 5 June 2024, the respondents continued to press for the repair of the issues listed above. As above, it was established that on Wednesday 5 June 2024, after various communications between the parties, Drew Sprout attended the property and was shown all the unrepaired defects.
After this inspection on 5 June 2024, nothing changed in relation to the repairs. No further repair work was undertaken taken by the agents. In frustration at the lack of many basic utilities in the house and their requests for repairs being ignored, the respondents decided unilaterally to stop paying rent until the repairs occurred and the last payment was made 21 June 2024.
The lessor, unaware that an inspection had occurred, pressed his agents to collect the outstanding rent, had his agents issue two notices issued and ultimately a notice to vacate after which the tenants left by 22 August 2024.
The applicant submitted that the respondents had no legal basis for ceasing to pay their rent. It is evident that the respondents took matters into their own hands and failed to apply to terminate the lease in accordance with Division 4.3 of the RT Act. They justified this on the basis that they had not been able to find anywhere else to rent and so could not put themselves in a position to terminate though they considered the property effectively unliveable.
The respondents submit that they had paid $5,200 to live in a house that lacked basic utilities, failed to comply with minimum housing standards and was arguably unfit for habitation.
The applicants seek the payment of all outstanding rent, and as part payment of that, the release of the $3,000 rental bond to them.
The respondents claim the bond should be released to them and that the outstanding rent should be excused on the basis of the failure of the lessor to a property with minimum housing standards in accordance with section 19A of the RT Act and the failure to repair to bring it up to minimum housing standards in accordance with section 19B and that standard term 86 applies in relation to termination for premises not fit for habitation.
The respondents relied on standard terms 86 and 87(2), which state:
86     The lessor or the tenant may, by written notice, terminate the tenancy on a date specified in the notice on the following grounds:
(a)   the premises are not fit for habitation;
(b)the premises are not available or will not be available because of Government action within a period of 4 weeks of the date that notice is given.
87(1)     In either case the lessor must give not less than 1 week’s notice of termination of the tenancy, and the rent abates from the date that the premises are uninhabitable.
(2)The tenant may give 2 days’ notice of termination of the tenancy.
(3)If neither the lessor nor the tenant give notice of termination of the tenancy, the rent abates for the period that the premises are unable to be used for habitation, but the tenancy resumes when they are able to be used again.
The Tribunal finds that reliance on these sections is flawed as the respondents did not give notice and seek to terminate the tenancy.
Nevertheless, the issue of what constitutes “fit for habitation” is relevant to this matter.
In Finn v Finato,[3] the NSW Consumer, Trader and Tenancy Tribunal (NSWCTTT) noted judicial statements regarding the words “fit for habitation” as follows:
The leading decision which guides the Tribunal in relation to this standard of habitability is Summers v Salford Corporation [1943] AC 283 in which Lord Atkin said:
“If the state of the repair of the house is such that by ordinary user damage may naturally be caused to the occupier either in respect of personal injury to life or limb or injury to health, then the house is not in all respects fit for habitation.... it is clear that premises may be unfit for human habitation even though it is physically possible for a tenant to reside in the premises.”
[3] Finn v Finato [2004] NSWCTTT 179 at [18]–[19], cited in Mathew & Anor v Barranco [2016] ACAT 102
In McLeish v FT Eastment & Sons Pty Ltd (1970) 91 WN (NSW) 268 CA, the Court in reliance upon Proudfoot v Hart (1890) 25 QBD 42 considered the words “fit for habitation” and “tenantable repair” and whether there was a difference. This is relevant to a consideration of section 25(1) of the RT Act, which imports both concepts. The Court stated:
must both import such a state as to repair that the premises might be used and dwelt in, not only for safety , but for reasonable comfort, by the class of persons by whom and for the sort of purpose for which, they were to be occupied....
The conclusion I draw... is that the landlord is obliged to hand the premise over to the tenant, at the commencement of the lease, in a reasonable state of repair having regard to its age, rent payable and the prospective life of the premises, and the state of the repair must at least meet the minimum standard inherent in the contemporary understanding of the term “fit for habitation”. ... (emphasis added)
In Bannister v Cheung,[4] the NSW Civil and Administrative Tribunal (NCAT) added:
In Hampel v South Australian Housing Trust [2007] SADC 64, Milsteed J stated (at [63]):
In my opinion, a house is unfit for human habitation if an occupier could be expected to suffer physical injury or injury to health from the ordinary use of the premises. It may be so unfit for any reason. The risk to health or safety may arise because the premises are in a state of disrepair or dilapidation or because of a lack of facilities such as the provision of adequate water, light, ventilation, and so on.
…
The test of “fit for habitation” is objective, rather than subjective. Residential premises may be unfit for habitation, even if the landlord is unaware of the defect. However, in De Solei v Palmhide Pty Limited [2010] NSWCTTT 464, the Tribunal noted that the test of proving that premises were not fit for habitation was a difficult one for a tenant to satisfy and a finding that premises are not fit for habitation is not to be lightly made.
[4] Bannister v Cheung [2014] NSWCATCD 105 at [18]–[20]
On the basis of the rulings cited above, it is clear that whether premises are fit for habitation is a question of fact, referenced to the nature and purpose of the property, the class of persons using it and contemporary standards.
In the circumstances, it is evident that whilst the premises were clearly deficient in a number of key aspects which made them difficult to live in, I am not persuaded that the premises in this case were unfit for habitation though they failed basic amenities, particularly in the kitchen, ensuite and master bedroom.
On the respondents’ own evidence, the lack of toilet ensuite was made up for a second toilet, albeit not providing the same amenity, or indeed the amenity they contracted for. The kitchen was effectively unusable — indeed the evidence was that the respondents cooked on a burner they provided themselves and washed dishes in the laundry and the main bedroom only lit by a light coming from the ensuite that worked. The other defects such as leaking pump, lack of lights and a defective laundry effectively meant that the tenants lived in a property that was substandard, did not match the description and went unrepaired. However, the respondents did indeed live there for five months and paid $5,200 in rent during that time.
However, the primary situation remains that no matter the reasons the applicant claimed, fundamental and urgent repairs went unfixed severely inhibiting the enjoyment of the premises which the respondents had a right to expect. This situation existed and was reported from the time of occupation and continued until the tenants vacated.
The respondents seek a return of the bond and to have the lessor’s application for outstanding rent dismissed. They do not claim to have the rent they paid refunded.
Under section 83(d) of the RT Act, the Tribunal may make:
(d) an order requiring the payment of compensation for loss of rent or any other loss caused by the breach of a residential tenancy agreement or occupancy agreement (emphasis added)
Similarly, under section 83 (m) of the RT Act, the Tribunal may make:
(m) any order the ACAT considers appropriate including declaratory orders in relation to a matter in this Act.
After assessing the evidence put to it, it is this Tribunal’s view that the respondents properly enjoyed approximately 40% use of the property from the time they occupied the premises until they left in August. Accordingly, the rent owing to the applicant lessor should be adjusted to reflect this.
The parties concur that the rental due, in accordance with the lease when they left on 22 August 2024 was $10,657.14, and that the respondents had paid a total of $5,200; those two figures totalling $15,857.14 for the period until the tenants vacated on 22 August 2024.
40% of the overall rental of $15,857.14 amounts to $6,342.85. As the respondent tenants had paid the applicant rent of $5,200, this Tribunal finds that the respondents owe the applicant the sum of $1,142.85. This sum is to be released to the applicant from the Office of Rental Bonds with the remnant of the bond to be released to the respondents.
………………………………..
Member M Hanna

Date(s) of hearing:

8 November 2024

Applicant:

In person

Vansh Malhotra (agent)

First Respondent:

Second Respondent:

In person

Remote attendance