Mansour v Dangar

[2017] ACAT 49

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

MANSOUR v DANGAR (Appeal) [2017] ACAT 49

AA 27/2016

Catchwords:              APPEAL – residential tenancies – powers of appeal tribunal – appeal process – whether there was a legal impediment to the use of the premises for residential purposes – whether by lack of postal, internet or telephone services the lessors permitted interference with the tenants’ quiet enjoyment – amount of compensation

Legislation cited:      ACT Civil and Administrative Tribunal Act 2008 ss 7, 24, 79, 82

Legislation Act 2001 ss 176, 196

Residential Tenancies Act 1997 ss 39, 46 prescribed terms clauses 51, 52

Subordinate

Legislation:ACT Civil and Administrative Tribunal Procedure Rules 2009 (No 2) r 21

Cases cited:Bangura v Fan [2013] ACAT 38

B&T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and Anor [2013] ACTSC 219
Bills v Trustees for Paul Sevier Practice Super [2016] ACAT 67
Brogan Prestige Properties v Strand and Black [2010] ACAT 60
Bygrave v Harris & O’Brien [2012] NSWCTTT 268
Chymiak v Marshall and Baldwin [2007] NSWCTTT 579
Conteh v Fan [2011] ACAT 45
Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192

Dangar & Anor v Mansour & Anor [2016] ACAT 61

Dargin v Melisi [2003] NSWCTTT 702
Edwards v Noble (1971) 125 CLR 296
Equuscorp Pty Ltd v Huxton [2012] HCA 7
Gynch v Polish Club Limited [2015] HCA 23
Hamod v Suncorp Metway Insurance Ltd [2006] NSWCA 243
Hawcroft v Hawcroft General Trading Co Pty Ltd [2016] NSWSC 555
House v R (1936) 55 CLR 499
Kutty v Jaczak [2013] NSWCTTT 205
Leaf v International Galleries [1950] 2 KB 86
McRae v Commonwealth Disposals Commission (1951) 84 CLR 377
Norbis v Norbis (1986) 161 CLR 513
Robinson v Harman (1848) 1 Ex 850
Sydney Water Corporation v Caruso & Ors [2009] NSWCA 391
The Legal Practitioner v Council of the Law Society of the ACT [2011] ACTSC 207
Theodorelos v Nexus Projects Pty Limited [2009] ACTSC 149
Van Loon & Leeder v Maloney [2006] NSWCTTT 737
Warren v Coombes (1979) 142 CLR 531
Zondervan v Gounden [2013] ACAT 12

Appeal Tribunal:                  Presidential Member M-T Daniel

Date of Orders:           3 July 2017     

Date of Reasons for Decision:         3 July 2017

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          AA 27/2016

BETWEEN:

AIMEN MANSOUR

MARIHAN MANSOUR

Applicants

AND:

HEMALKUMAR DANGAR

VANITABEN PRAJAPATI

Respondents

APPEAL TRIBUNAL:         Presidential Member M-T Daniel

DATE:3 July 2017

ORDER

The Tribunal orders that:

1.Order 3 of the Orders of 7 April 2016 is amended to replace ‘$4800’with ‘$3000’.

………………………………..

Presidential Member M-T Daniel

REASONS FOR DECISION

1.On 7 April 2016 a senior member of the ACT Civil and Administrative Tribunal (the Tribunal) made orders terminating a tenancy agreement between the parties and requiring the lessors to pay $4800 compensation to the tenants.[1] The compensation decision is the subject of this appeal.

[1] Dangar & Anor v Mansour & Anor [2016] ACAT 61

2.The orders were made after a short hearing, on the first return date of the tenants’ application. The Tribunal at that hearing had before it the tenants’ application and supporting documents, including copies of correspondence between the tenants and the lessors’ agents. The Tribunal also had before it documents filed by the lessors, including a statement from one of the lessors and copies of further correspondence. The tenants were present at the hearing and were represented by a solicitor from the Tenants Advice Union. The lessors were also present and were represented by their agent who had managed the property on their behalf.

3.The Tribunal was satisfied the parties had entered into a residential tenancy agreement on 23 November 2015 for premises described in the written agreement as “77b Gwen Meredith Loop Franklin”. The Tribunal found that the premises the subject of the residential tenancy agreement were a freestanding house, properly known as 77 Gwen Meredith Loop Franklin, and that the lessors had entered into two residential tenancy agreements in relation to that building: the downstairs portion of the house being leased to other persons and the upstairs portion of the house being leased to the tenants.

4.The Tribunal was satisfied that the tenants had encountered problems upon commencing to live in the property. These were summarised[2] as follows:

(a)Australia Post would not deliver mail to the address 77b Gwen Meredith Loop however they would deliver mail to 77 Gwen Meredith Loop into a mailbox shared with the downstairs residents. The lessors’ offer to pay for a PO Box for the tenants was rejected by the tenants as inconvenient.

(b)The tenants were unable to obtain insurance cover for their contents and motor vehicle due to not having a “valid address”.

(c)The tenants were unable to arrange connection of internet and telephone services because “none of the providers are able to find the property I am living in.”[3] The lessors had given evidence, which was conceded by the tenants, that the property was able to have connected to it up to six phone lines and internet connections from the NBN box at the property.

(d)The building had only one heating and cooling system, a ducted air conditioning system, with only one control unit to the entire building located in the upstairs portion. A proposal to change this to a split system for the benefit of the downstairs residents was objected to by the tenants.

(e)The tenants had expressed concerns that the lack of a “proper correct legitimate or registered address”[4] would mean that the premises would not be able to be located by fire and ambulance or police in an emergency.

[2] Paragraph 5 of the reasons for decision

[3] Paragraph 5(c) of the reasons for decision, quoted from the tenants’ written application

[4] Paragraph 5(e) of the reasons for decision

5.The Tribunal was satisfied that there had not been any planning approval granted for the property at 77 Gwen Meredith Loop to contain two dwellings.

6.The Tribunal was satisfied that the circumstances amounted to a breach by the lessors of clauses 51 and 52 of the prescribed terms of the residential tenancy agreement.[5]

[5] Paragraphs 7 & 17 of the reasons for decision

7.Clause 51 of the prescribed terms of a residential tenancy agreement provides that the lessor guarantees there is no legal impediment to the use of the premises for residential purposes. The Tribunal stated “there was a legal impediment to the use of the premises as two separate dwellings. The lessors are therefore in breach of clause 51 of the residential tenancy agreement.”[6]

[6] Paragraph 7 of the reasons for decision

8.Clause 52 of the prescribed terms provides that the lessor must not cause or permit any interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises. The Tribunal was satisfied that the tenants were unable to obtain full use of the premises because of their inability to have phone and internet connected, inability to obtain insurance, inability to have mail delivered and ongoing concerns as to access by emergency services. On this basis, the Tribunal found that the lessors were in breach of clause 52 of the residential tenancy agreement.[7]

[7] Paragraph 17 of the reasons for decision

9.The Tribunal was satisfied that the breaches of clauses 51 and 52 of the residential tenancy agreement were serious breaches of fundamental terms of the contract and the tenants were entitled to an order terminating the residential tenancy agreement.[8]

[8] Paragraph 18 of the reasons for decision

10.The tenants had also sought compensation for these breaches of the residential tenancy agreement. The Tribunal noted that the tenants had paid a total of $6660 in rent since the commencement of the tenancy agreement, and had received some benefit from the agreement as all utilities had been at no cost to them and they had received accommodation “albeit in difficult circumstances.”[9]

[9] Paragraph 20 of the reasons for decision

11.The Tribunal decided to refund $100 per week for the 18 weeks of the tenancy, a total of $1800, because of the breach of clause 51.[10]

[10] Paragraph 20 of the reasons for decision

12.In relation to the breach of clause 52 the Tribunal, taking into account the “distress, inconvenience and lack of peace comfort and privacy”[11] suffered by the tenants over the 18 week period, made an order for a further $3000 compensation to be paid by the lessors to the tenants. The Tribunal stated that this $3000 took into account “that the lessors through their agent responded inappropriately by characterising the tenants’ desire to terminate the tenancy, as a break lease” and that the tenants would “incur the costs of moving and the inconvenience of hunting for a new home much sooner than they would have, but for the breach by the lessors.”[12]

The appeal

[11] Paragraph 21 of the reasons for decision

[12] Paragraph 21 of the reasons for decision

13.On 28 April 2016 the lessors applied to appeal the Tribunal’s decision. The application appealed the decision only in relation to the amount of compensation.

14.At the time of filing the application for appeal the written reasons for the decision were not available. At the first directions hearing on 10 May 2016 the Appeal Tribunal stayed operation of the order for payment of compensation, and gave directions for the lessors to file an amended application setting out the questions of fact or law relied upon in the appeal. On 22 June 2016 the lessors filed an amended application for appeal in which nine grounds of appeal were listed. This amended application for appeal sought that the original decision be set aside and substituted with an order that there be no award of damages to the tenants. At the same time the lessors’ solicitor indicated that leave would be sought for the filing of further evidence, going to the availability of services to the premises.

15.The appeal was heard, as a rehearing, on 22 July 2016. The lessors and tenants were legally represented. At the appeal the grounds of appeal were reduced and refined to those eight set out below (see paragraphs 30 to 57). The foreshadowed application to admit further evidence was not pressed, the tenants having conceded the premises were provisioned for supply of services. The lessor’s solicitor departed from the relief sought in the amended application for appeal and instead submitted that, if the appeal was successful, the Appeal Tribunal should remit the matter to be heard afresh by a differently constituted Tribunal.

16.After hearing oral submissions from both parties, the Appeal Tribunal reserved the decision and gave the parties leave to file further submissions addressing the powers of the Appeal Tribunal and the orders that should be made if the Appeal Tribunal was satisfied that an error of fact or law was made out.

Legislation and principles applying to the conduct of the appeal

17.The provisions of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) dealing with appeals within the tribunal are few, and briefly worded. The ACAT Rules add procedural guidance around the conduct of such appeals. Appeals are creatures of statute,[13] and it is accepted that the legal principles developed in relation to appeals generally apply to appeals within the tribunal.

[13] Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192

18.Under section 79(3) of the ACAT Act an appeal from a decision of the tribunal may be brought on a question of fact or law. This means that the appeal exists for the correction of error. Because of the statutory limitation to appeals on ‘a question of fact or law’ an inquiry into the existence of error is the initial focus of the appeal.

19.If an error is shown to have been made it is then necessary for that error to be material to the outcome in order for the appeal to be successful.[14]

[14] Norbis v Norbis (1986) 161 CLR 513, Hamod v Suncorp Metway Insurance Ltd [2006] NSWCA 243 and Sydney Water Corporation v Caruso & Ors [2009] NSWCA 391

20.How is an appeal tribunal to decide if there is an error, and whether it was material to the outcome? Section 82 of the ACAT Act provides that the appeal tribunal may either deal with the appeal as a new application (a hearing de novo/new hearing) or as a rehearing (review).[15] In deciding the correct approach to take, the appeal tribunal is required by the ACAT Act to adopt a procedure which is as simple, quick, inexpensive and informal as is consistent with achieving justice, and the requirements of procedural fairness.[16] Other than containing these overarching requirements, the legislation does not dictate how the choice between a new hearing or a rehearing is to be made. It is nonetheless an important procedural distinction, which may have substantive consequences.

[15] The Legal Practitioner v Council of the Law Society of the ACT [2011] ACTSC 207 at [14]; B&T Constructions (ACT) Pty Ltd v Construction Occupations Registrar and Anor [2013] ACTSC 219 at [11] & [12]

[16] ACAT Act, section 7

21.For a new hearing, established principles dictate that the hearing starts afresh. Evidence may be given again, and additional evidence may be given. The appeal tribunal’s view on any question of fact or law is determinative of the issue. Any discretion to be exercised by the original tribunal is exercised anew by the appeal tribunal.[17]

[17] Theodorelos v Nexus Projects Pty Limited [2009] ACTSC 149 at [78]

22.By contrast, for a rehearing, the appeal tribunal relies upon the evidence given to the original tribunal, supplemented by any additional evidence which the parties are given leave to adduce. The appeal tribunal’s findings on questions of law are determinative. The appeal tribunal will not lightly substitute its own findings of fact for the original tribunal’s primary findings of fact, but may be less constrained in relation to drawing inferences of fact.[18] The appeal tribunal should not interfere with a discretionary decision unless satisfied that there has been an error in the exercise of discretion.[19]

[18] For example where the factual finding is clearly affected by error, or where there is no issue or credit or reliability of witnesses: Da Costa v Cockburn Salvage & Trading Pty Ltd (1970) 124 CLR 192; Edwards v Noble (1971) 125 CLR 296; Warren v Coombes (1979) 142 CLR 531

[19] Theodorelos at [78], House v R [1936] 55 CLR 499

23.In practice, at the initial directions hearing the appeal tribunal will consider the nature of the questions asserted in the application for appeal, the conduct of the original hearing, and other relevant matters such as the availability of new evidence,[20] to determine whether the appeal should proceed by way of rehearing or as a new application. Applications for appeal raising only questions of law or confined questions of fact are most expeditiously dealt with as a rehearing, occasionally with further evidence admitted in relation to areas of factual dispute. By contrast, where there appears to have been a real failure of process at the original hearing, such as a failure to hear both parties, the appeal might be heard as a new application. In such circumstances, this approach is often the simplest, quickest and most inexpensive way to achieve a fair and just outcome.

[20] Burns J in B& T at [13]

24.Where an appeal is successful[21] the question arises what orders may be made by the appeal tribunal. The ACAT Act does not set out the powers of the appeal tribunal. Rule 21 of the ACT Civil and Administrative Tribunal Procedure Rules 2009 (No 2) provides:

21 Appeals to tribunal—general powers

For an appeal to the tribunal, the tribunal—

(a) has all the powers and duties of the tribunal that made the order appealed from; and

(b) may draw inferences of fact; and

(c) may receive further evidence about questions of fact, either orally in a hearing, by written statement or in another way; and

(d) may make an order confirming, amending or setting aside the order of the tribunal appealed from; and

(e) may make any other order it considers appropriate.

[21] because the appeal tribunal is satisfied there has been an error of fact or law which was material to the outcome

25.It was submitted on behalf of the lessors that if the appeal was successful the appeal tribunal could remit the matter to the original Tribunal, or a differently constituted Tribunal, for the matter to be reheard.[22] The tenants submitted that the appeal tribunal does not have such a power.

[22] The lessor referred to Zondervan v Gounden [2013] ACAT 12 at [79]

26.The power to remit is not expressly included in those powers set out in Rule 21, although it can be argued to be contained within the ‘any other order’ power provided by subparagraph (e). It should be noted however that the Rules themselves are only procedural.[23]

[23] The power to make rules provided by section 24 of the ACAT Act is expressed to be only in relation to practice and procedure, and section 45 of the Legislation Act, if it could be relied upon, is limited to making rules for matters necessary and convenient to exercise the legislated jurisdiction

27.The jurisdiction and powers of the appeal tribunal exist as a consequence of the interaction of those provisions of the ACAT Act establishing the right to apply for appeal, and certain provisions of the Legislation Act 2001 (Legislation Act). By section 176 of the Legislation Act, the appeal tribunal is ‘vested with jurisdiction’ in relation to an application for appeal. The extent of that jurisdiction is not expressly defined, but would include all of the powers necessary and convenient for the performance of the appeal function.[24]

[24] See section 196 of the Legislation Act 2001

28.In considering the statutory context, a remittal power might be characterised as a way of ‘dealing’ with an appeal that, not being listed in section 82, is not available to an appeal tribunal. Alternatively, a remittal might be characterised as an order made as the outcome of dealing with the application for appeal. It might be argued that the power to remit is a necessary and convenient power for the conduct of an appeal, and follows from the grant of the appeals function. However there are examples of appeals which do not include the power to remit. A remittal power is not necessary for the appeal tribunal to conduct a rehearing or deal with an application for appeal as a new application, and might prove most inconvenient and untimely to the parties who would by that stage have gone through two tribunal processes. On the other hand, if a rehearing establishes that the tribunal was wrong in principle and that the error could have affected the outcome in ways that are uncertain, it might be less expensive and more efficient to remit the matter to the original (not new) tribunal.

29.In the end, because of the conclusions I have reached[25], it is not necessary in this case to determine the question of whether the appeal tribunal has a remittal power.

The grounds of appeal advanced by the lessors

[25] at paragraphs 62-65 following

30.At the hearing of the appeal, the lessors referenced eight errors of fact or law which were submitted to be material to the decision as to compensation. I address each of these in turn.

The Tribunal erred in law in finding, in the circumstances of the case, that there was a legal impediment to the use of the premises for residential purposes

31.The lessors submitted that for there to be a ‘legal impediment’ to the use of the premises for residential purposes, there must be a disturbance of the tenants’ use of the premises by force of law.[26] The lessors submitted that there was no such disturbance in this case. The lessors submitted that in the proceedings at first instance the onus was on the tenants, if a breach of clause 51 was asserted, to demonstrate that there was a lawful impediment to use of the premises for residential purposes and this onus was not discharged. The lessors submitted that it was clear from the facts that the property could be lawfully used as a residence, and that the tenants’ evidence at its highest was that the ACT Planning and Land Authority had only approved the property as a single dwelling, and that, by dividing the property into two tenancies, there was some breach of ACT law.

[26] The lessors referred to Conteh v Fan [2011] ACAT 45 and Bangura v Fan [2013] ACAT 38 as authorities for this proposition

32.The tenants argued that the test for ‘legal impediment’ proposed by the lessor was both unclear and, insofar as it required physical disturbance with use of the premises, incorrect. The tenants submitted that in the proceedings at first instance the onus was on the lessors to demonstrate that they had the relevant permission to lease the premises described as 77b Gwen Meredith Loop, and that while the Territory Plan allowed for creation of second residences subject to approval by the Planning and Land Authority, such approval had not been granted in this case. The tenants submitted that the Tribunal had found that the lessor had no power to grant a tenancy over premises titled as 77b Gwen Meredith Loop. It was submitted that the Tribunal was correct to find that there was a legal impediment to the leasing of premises known as 77b Gwen Meredith Loop, because no such property existed, and accordingly the lessors did not have title to it to be able to lawfully lease it to the tenants.

33.The tenants conceded that it is possible under the Residential Tenancies Act 1997 (RT Act) for multiple residential tenancy agreements to apply in relation to premises on a shared or non-exclusive basis, and there is no legal requirement for separate title to each premises in that situation. However, it was submitted that in circumstances where the premises were effectively advertised as being separately titled, with no indication of the issues one might expect from sharing facilities such a mailbox, it was appropriate for the Tribunal to find that the lessor had no power to grant a lease over the premises so described.

34.The parties provided examples of cases where a legal impediment to use of premises for residential purposes has been found to exist. These included where land is zoned for commercial use only or no certificate of occupancy had been granted.[27]

[27] Chymiak v Marshall and Baldwin [2007] NSWCTTT 579; Van Loon & Leeder v Maloney [2006] NSWCTTT 737; Dargin v Melisi [2003] NSWCTTT 702; Kutty v Jaczak [2013] NSWCTTT 205

35.In the current case, the Tribunal was satisfied that there was a legal impediment to “the use of the premises as two separate dwellings” and that the lessors were “therefore in breach of clause 51.” I am satisfied that in so finding, the Tribunal applied the wrong test. The question is not whether the premises can be used as a separate or second dwelling, but whether the premises “can be used for residential purposes.” There was no evidence, and there was no suggestion, that there was a legal impediment to the physical part of the building proposed to be leased by the tenants being able to be used for residential purposes.

36.The tenants’ submission that the property did not legally exist as described, and therefore could not legally be rented, is sophistry. There was a shared understanding between lessors and tenants as to the place which was to be leased. It is true that the description of that area used in the written agreement (77b) was a description used only by the two parties to that agreement. Both parties understood which premises were described as 77b. That description was not used by the broader community or government agencies. The use of this shared description in those circumstances does not render the residential tenancy agreement invalid or void, nor does it make the subject matter of the residential tenancy agreement suddenly nonexistent.[28]

[28] See McRae v Commonwealth Disposals Commission (1951) 84 CLR 377; Hawcroft v Hawcroft General Trading Co Pty Ltd [2016] NSWSC 555; Leaf v International Galleries [1950] 2 KB 86. The misdescription in the current case, together with the broader circumstances, might have provided a basis for termination under section 46 of the RT Act

37.Even if the granting of two leases over the property, and consequent use of the premises, amounted to the use of the property for two dwellings contrary to planning regulations, I am not satisfied that this amounts to a legal impediment to the use of the premises for residential purposes. It follows that the Tribunal erred in finding that there was an impediment to use of the premises for residential purposes and that the lessors had breached clause 51 of the residential tenancy agreement.

The Tribunal erred in law in finding that inability to have phone and internet connected or inability to have mail delivered amounted to breaches of quiet enjoyment

38.The lessors submitted that a mere failure to provide services could not amount to a breach of clause 52 of the prescribed terms. The lessors submitted that, in circumstances where it had been agreed that certain services would be provided, the failure to provide those services might be a breach of a different provision of the residential tenancy agreement and might provide grounds for a claim for compensation by way of a rent reduction, subject to any duty to mitigate loss. In support of this argument, the lessors pointed out that the entitlement to compensation under section 71 of the RT Act provides separately for compensation for loss of services and interference with the tenant’s quiet enjoyment.

39.In the current case, there was uncontested evidence that there was only one mailbox for the entire property, which was shared with the downstairs tenants, and Australia Post would not deliver to the address ‘77b’ even if a second mailbox with that number was erected. There was evidence before the Tribunal, and it was conceded before the Appeal Tribunal, that both phone and internet services could be connected to the premises. The difficulties that the tenants experienced in regard to these latter services could be traced back to the unavailability of a separate mailbox. The tenants wished to be invoiced by mail for telephone and internet services, and wished to receive such mail securely.

40.What can amount to interference with quiet enjoyment of the premises? The Tribunal considered this question extensively at paragraphs 10 to 14 of the decision. It is generally accepted that the loss of essential services such as heating or plumbing can, in some circumstances, be such an interference.[29] Do the tenants’ mail, telephone or internet facilities constitute an essential service or, if not strictly essential, nonetheless a service the lack of which can affect a tenant’s quiet enjoyment?

[29] This is so notwithstanding that an interference with such a service can give rise to a claim for compensation under section 71 in various respects

41.These days, suburban residents expect to be able to receive their mail securely at home. Most mailboxes come provisioned for a lock to be attached, or with a lock built in. Residents make purchases online which are routinely delivered by post, financial institutions provide replacement cards and financial information by post. Individuals are increasingly concerned about identity theft and the safety of information that is provided by mail. In suburban ACT, telephone and internet capability and the capacity for private and secure mail delivery to rental premises will ordinarily be assumed. I accept the Tribunal’s view that the loss or interruption of such services can, depending upon the circumstances of the case, amount to an interference with a tenant’s reasonable peace, comfort and privacy of their rental premises.

42.In this case, the Tribunal was satisfied that a lack of internet, telephone and mail facilities together amounted to an interference with the tenants’ quiet enjoyment of the premises. I agree with the Tribunal’s conclusion in this regard.

43.Did the lessors cause or permit this interference?[30] It was not contested that the lessors had made available to the downstairs residents the mailbox for the entire building, necessarily giving the downstairs residents access to the mailbox (and hence any mail) for the upstairs tenants. It was open to the Tribunal to conclude that by these actions the lessors permitted an interference with the quiet enjoyment of the premises by the tenants. I am satisfied that by arranging for, or permitting, the downstairs residents to have access to the mailbox of the tenants, the lessors caused or permitted interference with the reasonable peace, comfort and privacy of the tenants.

[30] Bills v Trustees for Paul Sevier Practice Super [2016] ACAT 67

44.There was no error in the Tribunal’s findings under this ground.

The Tribunal erred in law in failing to find that the correct measure of damages for the lack of internet was anything other than the cost of alternative internet, in this case via mobile internet, which, on the facts, was in an amount of $200 which the lessors offered to pay

45.The lessors submitted that the correct measure of damages for a breach in contract is “to be placed in the same position with respect to damages as if the contract had been performed by looking at the difference in their position had the contract not been breached and subject to the obligation to mitigate.”[31]

[31] Robinson v Harman (1848) 1 Ex 850

46.The Tribunal did not separately assess the compensation for lack of internet, but rather at paragraph 21 awarded a lump sum of $3000 to the tenants in relation to all of the loss and damage suffered as a consequence of the breach by the lessors of clause 52. It was open to the Tribunal to approach the issue in this way, and I am not satisfied that the Tribunal erred in its approach to the assessment of compensation in relation to the lack of internet.

The Tribunal erred in fact in finding that the tenant’s refusal to accept the Post Office box offered by the lessors or to allow mail to be delivered to “77 Gwen Meredith Loop” was reasonable

47.The Tribunal did not expressly find that the tenants’ refusal of the separate PO Box, or the shared mailbox, was reasonable. Such a finding is implicit in the award of compensation, because section 39 of the RT Act provides that a person is not entitled to compensation if the loss or part of the loss to be compensated could have been reasonably avoided.

48.There was a significant amount of written material before the Tribunal setting out the point of view of the tenants, and further evidence and submissions were provided at the hearing. By reference to that material I am satisfied it was open to the Tribunal to find, in awarding compensation to the tenants, that they had acted reasonably in not accepting the proposed alternative arrangements. In light of my preceding comments about modern expectations of mail security, I too am satisfied the refusal of the PO Box and shared mail was reasonable in circumstances where there had been no suggestion prior to entering into the lease that the mail facilities were to be shared.

The Tribunal erred in fact in finding that the tenants were unable to obtain insurance

49.The Tribunal repeated this finding in paragraphs 5(b) and 15 of the reasons for decision. The tenants gave evidence to the Tribunal that they were unable to obtain insurance due to difficulties posed by the ‘invalid’ address. It was submitted that the lessors’ agent also gave evidence and that the Tribunal preferred the evidence of the tenants on this point. It was open to the Tribunal to do so. The Appeal Tribunal is not satisfied that the Tribunal erred in making the finding that the tenants were unable to obtain insurance.

The Tribunal erred in fact in finding that the tenants’ concerns that emergency services would be unable to find the premises was reasonable; or could not be alleviated by quoting the address of “77 Gwen Meredith Loop”

50.The lessors submitted that this concern was first raised by the Tribunal during the hearing. The tenants submitted that this issue was taken into account only as an example of inconvenience to the tenants.

51.The Tribunal did not expressly find that this concern about emergency services locating the property was ‘reasonable’. The finding is implicit, to the extent that this concern was referenced as one of the matters for which compensation was awarded.

52.There was ample evidence before the Tribunal that a variety of descriptions or addresses had been used to refer to the premises the subject of the residential tenancy agreement. It must be remembered that in the event that emergency services need to be contacted, it cannot be assumed that the person calling emergency services is the tenant – it might be the tenant’s guest or visitor.  On the evidence it was open to the Tribunal to find that a concern that the wrong address might be given, in an emergency, was reasonable. The Appeal Tribunal is not satisfied that the Tribunal erred in making this finding.

The Tribunal erred in awarding a rent reduction of $100 per week (or 27% of the weekly rent) for matters that in reality did not significantly impinge on the tenants day-to-day life and use of the premises and had utilities at no cost

53.The Tribunal at paragraph 20 awarded separate damages of $100 per week for the breach of clause 51. The Appeal Tribunal is satisfied that the Tribunal erred in finding that clause 51 was breached. It follows that no compensation for breach of that clause can be awarded and the rent reduction must be set aside.

The Tribunal erred in awarding damages of $3000, which was excessive in the circumstances, especially when combined with the rent reduction of $100 per week

54.The lessor referred the Appeal Tribunal to Brogan Prestige Properties v Strand and Black [2010] ACAT 60 where it was stated :

The assessment of appropriate compensation is one for judgment by the Tribunal upon which reasonable minds may differ. In general the Tribunal is guided by reference to decisions in comparative cases although it is not bound by such cases and must have regard to the particular circumstances of the case in hand.

55.The lessor submitted that the Tribunal had erred in awarding compensation for the same loss or damage twice, once for each clause found to have been breached. I have already found that the Tribunal erred in finding clause 51 to be breached, and it follows that the order for rent reduction awarded separately in relation to that breach must be set aside.

56.I turn then to consider whether the award of $3000 in relation to the breach of clause 52 is in error. As it is a discretionary decision, the bases on which it might be found to be erroneous are well established.[32] In this case, the lessor submits the award of $3000 was so excessive that it amounts to a decision which no reasonable tribunal could have come to. The lessors submitted that the $3000 was not in line with other ACT or interstate cases, however no similar cases were provided to, or identified by, the Appeal Tribunal by way of comparison which clearly support this assertion. The tenants drew the Appeal Tribunal’s attention to a number of authorities where significant amounts of compensation were awarded, however those cases were not strictly comparable either factually or legally.

[32] House v R (1936) 55 CLR 499

57.The Tribunal could have been in no doubt as to the economic and non-economic impact upon the tenants of the lessors’ breach of clause 52. The tone and content of the tenants’ email correspondence, and their application to the Tribunal, was telling. They had been engaged in unproductive and obviously frustrating communications in an attempt to establish service provision for a number of months, and their interactions with the lessors’ agent had resulted in their being threatened with notices to remedy, and ‘break lease’ fees. The tenants were now faced with incurring further removal costs as well as the personal inconvenience of moving house again. The lessors’ highlighted the inflexibility of the tenants, and queried whether that inflexibility was in a practical sense the source of much of their distress and discomfort. Given the period of time over which the interference occurred, and the financial and non-financial impacts of ending the lease and entering a new one, it was open to the Tribunal to find that $3000 as a global amount was appropriate recompense for the loss of quiet enjoyment the tenants had experienced, tasking into account the part the tenants’ unwillingness to compromise may have played. I do not consider that this figure is at the higher end of the scale. It is well within the range that a reasonable tribunal might have awarded in the circumstances.

An aside on void leases

58.It was submitted on behalf of the tenants that where there has been a breach of clause 51 of the prescribed terms, this is a breach of such a fundamental term that the correct approach is that the tenancy agreement is considered void ab initio and the affected tenant must be repaid the money they have paid as rent under the nonexistent lease.[33] The lessors submitted that the legal situation is more complex, and referred the Tribunal to a number of authorities, some specific to residential tenancy and others involving the law of contract.[34] The lessors submitted that even if it were the case that the lessors had breached ACT planning requirements, this would not of itself render the tenancy illegal.

[33] Bangura v Fan [2013] ACAT 38 at [64], [65] & [67]

[34] Gynch v Polish Club Limited [2015] HCA 23; Equuscorp Pty Ltd v Huxton [2012] HCA 7; Bygrave v Harris & O’Brien [2012] NSWCTTT 268

59.I do not accept the legal analysis put on behalf of the tenants. First, I am not satisfied that invalidity always follows from the finding of a breach of clause 51. Legal impediments to use of the premises for residential purposes may come in different shapes or sizes. There is no logical reason why a legal impediment to use of the premises for residential purposes will necessarily make a residential tenancy agreement in relation to such premises void. There is no legislative provision to this effect. The RT Act could easily have provided that a breach of clause 51 made the residential tenancy agreement void, however it does not do so. There is no binding authority for the proposition that invalidity always results from the existence of a legal impediment.

60.The correct approach to this argument is that more generally adopted in contract law, as submitted on behalf of the lessors.

61.In addition, I note that there are procedural difficulties with the approach urged on behalf of the tenants. It is not open to a tenant to make an application to the tribunal for compensation under the RT Act in relation to a residential tenancy agreement which is said to not exist. This is because the RT Act jurisdiction is available only in relation to a residential tenancy or occupancy agreement. If a tenant wishes to recover moneys on the basis that there is no contract between the parties, the tenant must apply to the tribunal in its civil jurisdiction. The tribunal will then consider the full circumstances of the asserted illegality to determine whether the contract is void, and the usual defences to such a civil application are available to the lessor.

Conclusion

62.In conclusion, I am satisfied that the Tribunal erred in one respect in its decision, in relation to clause 51, and that error was material to the outcome.

63.The lessors submitted that if the Appeal Tribunal was so satisfied, the decision should be set aside and the matter remitted to be heard again. It is not clear that the Appeal Tribunal has a remittal power. Even if it does, I do not consider that in the current case such an order should be made. Remittal of the matter would cause further delay, expense and inconvenience to the parties. More significantly, remittal is unnecessary.

64.The Tribunal’s written reasons for decision are clear as to the amounts of compensation awarded in respect of each breach, such that the orders that should flow as a consequence of this successful appeal are straightforward. The Tribunal was correct to find, in this case, that the lack of a secure and private mailbox, and the consequential interference with telephone and internet services, amounted to a breach of clause 52. Compensation of $3000 for that breach and its associated impacts was within the permissible range and should stand. I am however satisfied that the Tribunal erred in finding that there was a breach of clause 51 of the residential tenancy agreement, and it follows that the compensation of $1800 awarded solely on that basis must be set aside.

65.I will order that the Tribunal’s orders of 7 April 2016 be amended only to replace the compensation amount of $4800 with an amount of $3000.

………………………………..

Presidential Member M-T Daniel

HEARING DETAILS

FILE NUMBER:	AA 27/2016
PARTIES, APPLICANT:	Aimen Mansour, Marihan Mansour
PARTIES, RESPONDENT:	Hemalkumar Dangar, Vanitaben Prajapati
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Mr Peter Christensen
SOLICITORS FOR RESPONDENT	Ms Vanessa Faulder, Tenants Union ACT
TRIBUNAL MEMBERS:	Presidential Member M-T Daniel
DATES OF HEARING:	22 July 2016