Jones v Leung
[2013] ACAT 79
•1 October 2013
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
JONES AND ANOR v LEUNG AND ORS
(Residential Tenancies) [2013] ACAT 79
RT 13/731
Catchwords: RESIDENTIAL TENANCIES – whether tenants experience hardship: strained relationship among tenants, and burden of rent liability when some tenants move out of the property – whether landlords experience hardship: remaining tenants not paying full rent – consent of parties to terminate tenancy
Legislation:Residential Tenancies Act 1997, ss 5, 6, 44 and 72
Tribunal: Mr P. Thompson - Member
Date of Orders: 1 October 2013
Date of Reasons for Decision: 29 November 2013
ACT CIVIL AND ADMINISTRATIVE TRIBUNAL RT 13/731
MARTIN JONES
KELLY TUCKERMAN
Applicants
HUNG YUK LEUNG &
RACHEL MCGARITY
JAMES COLLINGRIDGE
JARRAD LINTON-HARLAND
SAMANTHA MADDERN
Respondents
TRIBUNAL: Mr P. Thompson
DATE:1 October 2013
ORDER
The Tribunal Orders that:
By Consent lease terminated 26 November 2013. Proceedings otherwise dismissed.
………………………………..
Mr P. Thompson
Member
REASONS FOR DECISION
On 12 August 2013 Mr Martin Jones and Ms Kelly Tuckerman made an application to the ACT Civil and Administrative Tribunal (ACAT) for the resolution of a residential tenancy dispute.
The respondent to the application was named as Hung Yuk Leung.
Attached to the application was a copy of a residential tenancy agreement signed by the initial parties to that agreement. That copy is undated, but states that the term of the agreement was for twelve months beginning on 20 December 2012 and ending on 19 December 2013.
According to that document, the initial tenants were, Martin Jones, Rachael McGarity, Josiah West, James Collingridge, Kelly Tuckerman and Jarrad Linton-Harland.
In their Statement of Particulars, the applicants stated that they were seeking to terminate their lease on the grounds of hardship and were seeking the return of bond monies as a result. Outlining a brief history of the dispute, the applicants stated:
Both Kelly and I moved into 46 Buckingham Street, Amoroo (sic) in December 2012.
What was initially a comfortable house quickly became an experience of continual harassment and discomfort.
The actions of our housemates in using our room and bathrooms without permission, placing blow up pools in the centre of the house, ongoing harassment in the house and continuing to not pay bills on time is the foundation of our discomfort.
Deciding that we no longer wanted to live in this situation we endeavoured to find housemates to replace us.
The other housemates continually treated prospective housemates poorly and prevented a swap happening. We later found out in one instance that this was due to the prospective tenants asian heritage.
Frustratingly another one of the tenants found a potential replacement and they were treated to a far different standard. This ultimately meant that person was to move in.
The stresses of these living conditions has had a strong impact on my mental health, and I was required to seek medical assistance. I have now been recognized as having high anxiety and stress. My doctor (Dr Dora Shirin) has strongly recommended that I vacate these living arrangements.
Having continually tried to leave this house, the situation reached such a point that Kelly and I felt compelled to move out on the 6th of August into temporary accommodation.
We now seek to have the tenancy agreement terminated and the bond ($760.00) paid back.
Also on 12 August 2013, the applicants lodged a letter from Dr. Dora Shirin whose address was stated to be care of the University of Canberra. Dr. Shirin certified that Mr Jones was suffering from stress and anxiety and that from the history as stated to her, she estimated that this condition was caused by stressful living conditions of his previous house that he was sharing with his girl friend and other flatmates. She requested that the Tribunal take this into consideration when deciding this matter, specifically in regard to allowing Mr Jones to leave that house without financial disadvantage.
On 20 August 2013 a notice was sent to the respondent Hung Yuk Leung, along with a copy of the application, advising that the matter was listed before the Tribunal at 11:00 am on 30 August 2013.
On 26 August 2013, the respondent lodged a response with the Tribunal contesting the application on the following grounds:
This is a fix-term (sic) contract which ends on 19 December,2013.If Martin and Kelly want to terminate the contract earlier than 19th of December 2013, they need to compensate me for the loss of rent between the date they stopped paying the rent and the date when the new tenant(s) start paying the rent, or the end of the term of the original contract, whichever happens first.
Plus, they need to compensate me for the cost of time and efforts I put in to re-let (sic) the house.
No dollar amount was claimed either as a counterclaim or as a set-off, and no counterclaim fee accompanied the response. Particulars were, however, supplied of the respondent’s representative who was named as Xi He and who resided at the same address as the respondent.
On 30 August 2013, the matter came before Member Mary-Therese Daniel for a hearing. Mr Jones, Ms Tuckerman and Ms Leung, all appeared. Member Daniel noted that of the original 6 tenants, only three remained. Evidently, Mr Jones and Ms Tuckerman moved out on 6 August 2013. Mr Josiah West had also moved out and had been replaced by Ms Samantha Maddern. Ms Daniel did not record the dates relevant to these tenants.
Noting that the tenants other than Ms Leung had not been served or named as respondents, Member Daniel made the following orders:
1.Rachael McGarrity(sic), James Collingridge, Jarrad Linton-Harland and Samantha Maddern are joined as second, third, fourth, and fifth respondents to these proceedings.
2.The application for termination on grounds of hardship is adjourned to a preliminary conference on Monday 9th September 2013 at 3:00pm.
3.If the lessor Mrs. Leung wishes to pursue a counter-claim for compensation for early termination as a part of these proceedings she is to pay the required filing fee prior to the conference on 9th September 2013.
It should be noted that the respondent Ms Leung filed a general power of attorney dated 30 August 2013 in these proceedings, appointing Xi He as her attorney.
On 9 September 2013, after making a number of directions to ensure the timely disposition of this matter, Member Daniel set down the matter for hearing at
10:00 am on Tuesday, 1 October 2013.On 17 September 2013, Mr Jones emailed the tribunal attaching the following documents:
(a)Timeline of events;
(b)Witness Statement - Martin Jones;
(c)Witness Statement – Kelly Tuckerman;
(d)Witness Statement – Debora Kanak;
(e)Witness Statement - Josiah West;
(f)Tenancy Agreement - Between Martin Jones, Kelly Tuckerman, Debora Kanak and Peter Castle dated 1 August 2013;
(g)Letter from Jones & Tuckerman addressed to their landlords Mr & Mrs. Yuk dated 6 August 2013. Letter advises reasons for wishing to vacate premises and gives a date of 7 August 2013;
(h)Email from Xi He dated 6 August 2013;
(i)Letter from Xi He (not dated) setting out how the tenancy agreement can be terminated; and
(j)Correspondence from the applicants to the respondents re inspection and lease issues.
On 18 September 2013, Dr Xi He forwarded a two-page document in response to the applicants’ witness statements. The document included a statement from him as well as a timeline of events.
On 24 September 2013, Mr James Collingridge emailed the tribunal the following documents:
(a)Timeline of events;
(b)Witness Statement – James Collingridge;
(c)Witness Statement - Rachael McGarity;
(d)Witness Statement- Jarrad Linton-Harland; and
(e)Witness Statement - Samantha Maddern.
The matter came on for hearing before me at 10:00 am on 1 October 2013 with the two applicants appearing in person. Dr Xi He appeared for the respondent under the Power of Attorney, but subsequently claimed to own the rental property at
46 Buckingham Street, Amaroo in the Australian Capital Territory. Dr Xi He also informed me that Hung Yuk Leung, the named respondent, was his wife.I was somewhat surprised by this statement as the residential tenancy agreement itself contains Xi He’s name only as a witness to the signature of the landlord, Hung Yuk Leung.
Neither his wife, as applicant, nor Dr Xi He, as her attorney, had lodged the filing fee for the counter-claim and therefore there was no valid counter-claim before the Tribunal.
Mr Peter Christensen appeared, along with all four of the respondents added to the proceedings by Member Daniel, advising that he was representing the 2nd, 3rd & 4th respondents, but in realty he was representing all four of the remaining respondents/tenants and made submissions on their behalf opposing the application and, in particular, any order that would result in an increased rent burden for them.
At this point I would note that the Residential Tenancy Act 1997 (the Act) itself, defines a dispute as a tenancy dispute, for the purposes of the Act if it-
(a)is between the parties to a residential tenancy agreement; and
(b)is about, arises from , or relates to, the agreement. (section 72. (1))
The parties to a residential tenancy agreement are the lessor, being the person granting a right of occupation under the agreement, and the tenant(s), being the person(s) having a right of occupation under the agreement. (section 5 and 6 of the Act)
Whilst it was not argued to any extent by Mr Christensen, in my view, the Act does not envisage or make provision for the resolution of disputes solely between tenants.
This dispute however could not be satisfactorily resolved without the participation of the 2nd, 3rd, 4th & 5th respondents.
As there was no counter-claim, the only matters before the Tribunal to be determined were the two issues identified by the applicants to be in dispute, namely, their desire to have the lease terminated on the grounds of hardship and the subsequent return of their bond monies.
The provisions relating to hardship are set out in section 44 of the Act under the heading ‘Significant hardship’. Those provisions are as follows.
44Significant hardship
(1)On application by a tenant, the ACAT may terminate a fixed term agreement in accordance with this section if satisfied that—
(a)the tenant would suffer significant hardship were the agreement to continue; and
(b)the level of hardship is such that it is appropriate and just to terminate the agreement during its fixed term.
(2)If—
(a)the ACAT decides to terminate a residential tenancy agreement in accordance with this section; and
(b)the ACAT is satisfied that—
(i)the tenant would suffer significant hardship if the agreement were not terminated within 8 weeks after the making of the decision to terminate; and
(ii)that hardship would be greater than the hardship the lessor would suffer if the agreement were terminated within 8 weeks after that day;
the ACAT must—
(c)specify the day, less than 8 weeks after the making of the decision to terminate, when the termination is to happen; and
(d)give the lessor the notice of the proposed termination that is reasonable in the circumstances.
(3)If—
(a)the ACAT decides to terminate a residential tenancy agreement in accordance with this section; and
(b)the ACAT is not satisfied about the matters mentioned in subsection (2) (b);
the ACAT must—
(c)taking into consideration the need to comply with paragraph (d), specify the day, not less than 8 weeks after the making of the decision to terminate, when the termination is to happen; and
(d)give the lessor not less than 8 weeks notice of the proposed termination.
Turning to the various statements lodged by each of the parties to this application, it was obvious to me, judging from the various claims and incidents detailed and the denials of those claims, with subsequent counter claims, that the relationships between the tenants were fractured beyond repair, and that they had divided into two camps. It is clear however, that the decision by the applicants to move out was made around 1 May 2013, less than five months into a twelve months fixed term lease.
Whether that decision was made because the applicants merely wanted to have their own place as claimed by the tenant respondents or was made because of the contentious issues between the parties was never fully explored when it became obviously unnecessary to do so.
Mr Jones obtained a doctor’s certificate stating that he was suffering anxiety and stress as a result of his housing situation. I was not prepared to go behind that certificate.
No justification, apart from difficulties in getting along with her fellow tenants, was ever put forward by Ms Tuckerman. I do, however, acknowledge that they were a couple, and it would be inappropriate to rule that what affected Mr Jones did not affect her.
Unfortunately, Dr Xi He was also suffering stress as a result of the dispute and the fact that since the applicants had left, he and his wife were not receiving the full amount of the rent for the premises. He also was in possession of a doctor’s certificate.
The decision of the two applicants to vacate the premises left the lessors considerably out of pocket and was the cause of some hardship to them. It should also be noted that the applicants vacated without the sanction of the Tribunal, and were not paying rent at the time of the hearing.
The remaining four tenants were unable to make up the deficit and were therefore in breach of their tenancy agreement. They were at risk of eviction, basically through no fault of their own.
Mr. Christensen prepared detailed submissions before the hearing, which were handed up early in the proceedings. Those submissions were helpful..
Mr Christensen relevantly submitted the following:
...
3 The co-tenant respondents submit that, properly understood, s. 44 only applies where all the joint tenants apply to terminate the tenancy.
4. The co-tenant respondents refer to previous decisions of ACAT’s predecessor, the ACT Residential Tenancies Tribunal to the effect there is an implied contract between the joint tenants that has the effect of binding them to the tenancy for the duration of the fixed term (but no longer)- see Baird v Campbell [2005] ACTRTT 8, particularly at paragraph 25; ACT Housing v Midgeley [2001] ACTRTT 7.
5. The position in NSW is clear – see Anforth Christensen & Taylor at paragraph 2.101.1, although s. 104 of the Residential Tenancies ACT 2010 specifically inserted a provision that permits their Tribunal to terminate within the fixed term.
6. Any termination of the tenancy for the applicants will cause the co-tenant respondents to pay increased rent to cover the whole of the property and will cause hardship to them, as they are all university students on low incomes.
7. If the Tribunal takes the view it can order a termination of the tenancy in these circumstances, the co-tenant respondents submit:
8. One of the purposes behind the enactment of the Act was the avoidance of “self-help” remedies, instead requiring aggrieved parties to make an appropriate application to the Tribunal to resolve the dispute.
9. It is submitted that the co-tenant respondents should not be put in a worse position because the departing tenants unilaterally decided to vacate the premises without making the appropriate application to the Tribunal – in particular, they should not be liable for any extra rent prior to the Tribunal making an order.
10. The co-tenant respondents submit that any “hardship” to the departing tenants prior to them vacating the premises was relatively minor and part of the normal friction that affects many group houses. It is not of the nature to constitute “significant hardship”.
11. The respondent co-tenants submit the departing tenants cannot “manufacture” hardship by moving out and thereby making themselves liable for double rent.
12. The issue of significant hardship was considered by the former RTT in Whiddon v Bartlett & Manning [2002] ACTRTT3 where the Tribunal noted that” significant hardship is not defined in the ACT, but that it requires (at paragraph 10):
a. actual hardship, not mere inconvenience, must be
established;b. financial hardship, personal hardship and administrative
difficulties may alone or in combination with each other
or with other factors be considered.c. to be significant hardship must be real and important, or
of a noticeably large amount; and it must cause distress
or upset to the lessor; it must be more than insignificant.
13. In Mignone v Gilmour [2002] ACTRTT 28 the RTT (held) that a tenant’s serious illness amounted to significant hardship.
14. The NSW cases cited at paragraphs 2.104.2 of Anforth, Christensen & Taylor show a much higher threshold for significant hardship than that expected by the departing tenants.
15. If the Tribunal is minded to terminate the tenancy before the end of the fixed term (which is opposed) the co-tenant respondents submit that it is appropriate to allow the 8 weeks referred to in s. 44 (3) as appropriate notice to permit them to vacate the property and secure alternative accommodation after the end of the University of Canberra examination period. To require then to vacate prior to that would cause disruption of their studies and significant hardship.
While I accepted Mr Christensen’s submission that section 44 only applies where all joint tenants apply to terminate a tenancy, I found on the evidence in this matter that the situation in respect of all six tenants was untenable. The circumstances that the landlord and her agent Dr Xi He found themselves in, through no fault of their own, was distressing both emotionally and financially.
There was indeed, significant hardship being suffered by most, if not, all of the parties to these proceedings. I was, however, not satisfied that the hardship suffered by the applicants, and Mr Jones in particular, was greater than the hardship being suffered by the owner of the property.
I was not, therefore, of a mind to terminate the tenancy within the 8 weeks’ period after making a decision to terminate as specified in section 44, and, in any event, I did not have the consent of the co-tenant respondents or the landlord to make such an order.
I did, however, eventually get the consent of all parties to terminate the lease as at 26 November 2013 and made a consent order accordingly.
The applicants were not prepared to make an offer to the landlord in relation to rent outstanding as at the date of hearing or in respect of the rent that would eventually accrue between that date and the date of termination. As there was no counter-claim, and in the absence of consent, I left the matter up to Dr Xi He who indicated he would continue negotiations with the applicants.
The question of the return of the bond was not argued and in any event would be a matter for the parties to negotiate after 26 November 2013.
………………………………..
Mr P. Thompson - Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A
FILE NUMBER: | RT 13/731 |
PARTIES, APPLICANTS: | Martin Jones & Kelly Tuckerman |
PARTIES, RESPONDENTS: | Hung Yuk Leung, Rachel McGarity, James Collingridge, Jarrad Linton-Harland, Samantha Maddern |
TRIBUNAL MEMBERS: | Mr P. Thompson - Member |
DATES OF HEARING: | 1 October 2013 |
PLACE OF HEARING: | ACAT Canberra |
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