Mohammad Munir Hussain (MM International (Australia) Pty Ltd) v Brian Garrington and Judy Garrington
[2007] ACTRTT 8
•22 January 2007
Mohammad Munir Hussain (MM International (Australia) Pty Ltd) v Brian
Garrington and Judy Garrington [2007] ACTRTT 8
(23 March 2007)
CATCHWORDS
ISSUES
Existence of fixed term agreement
Termination by notice by lessor of periodic tenancy
LEGISLATION
Residential Tenancies Act 1997 (ACT)
Sections: 104(i) & (l)
Prescribed terms: Clause 96, 97
CASES CITED
Case Reference Number: RT 2399 of 2006
Re: Premises at 11/6 Wilkins Street MAWSON ACT 2607
DECISION
ORDERS
1. That the Residential Tenancy Agreement between the parties is a periodic tenancy, following expiration of fixed term in September 2006.
2. That the tenancy shall terminate on 19th March 2007 at 4pm. The tenant shall deliver vacant possession to the lessor at that time.
3. That the tenant may terminate prior to 19th March 2007 upon the giving of 48 hours written notice.
4. That the tenant is to pay rent of $150.00 per week until termination.
5. That the lessor is to undertake any urgent repairs in accordance with the Residential Tenancy Agreement.
Member: Jann Lennard
Date: 22 January 2007
REASONS FOR DECISION
BACKGROUND
1) The Respondents are the owners of premises at 11 Taylor View, 6 Wilkins Street, Mawson in the ACT.
2) The Applicant has been a resident of these premises since 15 October 2001. The tenant as expressed in the various residential tenancies agreements tendered to the Tribunal is MM International (Australia) Pty Ltd. The Tribunal received in evidence a Certificate of Registration for that company and Mr Hussain stated that he was a Director of that company. Mr Hussain stated that he had caused the tenancy agreement to be in the name of the company for business reasons and that he had overseas investors who insisted upon this. In the application to the Tribunal Mr Hussain has asserted ‘the agreement under my company name around the world business associated knows that too”. No evidence was produced to support these statements.
3) The Tribunal accepted that the dealings and correspondence between the lessors’ agent and the tenant had always been through Mr Hussain, and there was no dispute that Mr and Mrs Hussain and their children occupied the premises as a residence, although Mr Hussain stated that he conducted his many businesses from the premises. The Tribunal notes that this application was made in the name of Mohammad Munir Hussain. Therefore in these reasons and the Orders made by the Tribunal in matter number 2399 of 2007, the tenant is MM International (Australia) Pty Ltd. Mr Hussain appeared on behalf of the tenant at the hearing conducted on 22 January 2007.
4) Peter Blackshaw Real Estate Pty Ltd has been the lessors’ agent and has managed the premises for the entire tenancy. Ms Sharon Clugston, Peter Blackshaw Real Estate appeared on behalf of the lessors at the hearing conducted 22 January 2007.
5) The weekly rent paid by the tenant was $150 at the date of the Notice to Vacate.
6) The lessors, through their agent, served a Notice to Vacate on the tenant on 13 October 2006. The Notice to Vacate was on the grounds set out in Clause 96(1)(e) of the Standard Residential Terms – that the lessor intended to renovate the premises. The Notice to Vacate specified 8 January 2007 as the date for vacation by the tenant.
7) Mr Hussain gave evidence that he responded to the Notice to Vacate by contacting the lessors’ agent and asking for an ‘extension of the lease’. Mr Hussain and the lessors’ agent gave evidence that lessors offered to allow the tenancy to continue for a period of 6 or 12 months, but at an increased rent of $220, from 15 February 2007. The lessors’ agent wrote to the tenant in those terms on 7 December 2006.
8) The tenant replied to the agent by letter dated 14 December 2006 and asserted that the rent could not be increased because the parties were in a fixed term tenancy which would not expire until September 2007. The Residential Tenancy Tribunal notes that Mr Hussain did not assert on 14 December that the alleged tenancy agreement allowed the tenant to resist a Notice to Vacate under Clause 96. Mr Hussain tendered a photocopied document which he asserted gave rise to this fixed term, the Tribunal notes that the tenant, while asserting this agreement against the lessor had not complied with Item 9 of the front page of the agreement which stated that the rent was to be $155 from 15 September 2006 and had continued to pay rent at the lower amount until the date of the hearing.
The issues before the Tribunal
The tenant’s application set out three issues for the Tribunal:
a)Whether a fixed term residential tenancy agreement, expiring on 15 September 2007 existed between the parties;
b)Whether the Notice to Vacate dated 13 October 2006 was valid, and
c)Whether the increases in rent to $220 was excessive.
The first two issues are linked: if the parties are in a fixed term agreement, the lessor is not able to terminate the tenancy prior to the expiration of the fixed term by notice under clause 96. If, however, the parties are in a periodic tenancy then the lessor is entitled to terminate the tenancy by serving notice under Clause 96: the Tribunal would then have to determine whether the notice given on 13 October complied with the requirements of the Act and was therefore valid.
Are the parties in a fixed term tenancy agreement, expiring 15 September 2007?
9) The tenant in a written submission asserted that the parties had been in a series of fixed term agreements during the majority of time since the tenant took occupation of the premises on 15 October 2001. The written submission states; On 30 August 2002 the Real Estate Agent…made us an offer of three consecutive agreements by letter dated 29 August 2002. We accepted this offer, signed all three agreements and sent them back by post on 14 February 2003.
10) In support of this assertion the tenant tendered letters from Peter Blackshaw dated 29 August 2002 and 30 August 2002.
11) The letter of 29 August 2002 indicates that the lessor sent three copies of each Residential Tenancy Agreement, each of which consisted of a schedule, the prescribed terms and explanatory notes. The final paragraph of this letter reads:
(i)If you have any queries regarding any of the above please do not hesitate to contact our office. Once the documents are signed please return ALL of them to our office for counter signature by our agency, and you will receive one copy of each.
12) The letter dated 30 August 2002 states that the agent has made up three separate leases for the tenant to consider. The leases are detailed as follows:
a)the first lease from 15 September 2002 to 14 September 2005 at a weekly rent of $135 per week until 15 September 2004 and $145 for the last year;
b)the second lease from 15 September 2005 to 14 September 2006 at a weekly rent of $150;
c)the third lease from 15 September 2006 to 14 September 2007 at a weekly rent of $155.
13) The evidence before the Tribunal showed that, contrary to the impression conveyed by the written submission made in the application, the tenant did not directly respond to the letters of 29 and 30 August 2002. Further negotiations were conducted by the parties, and revised agreements were sent to the tenants. Neither the tenant nor the lessors’ agent gave evidence as to the content or effect of these revisions. The Tribunal accepts the evidence of Ms Clagston that these negotiations were conducted by Ms Kylie Oyston, author of the letters of 29 & 30 August 2002, referred to above, and the letter of 30 January 2003 and the note dated 6 February 2003, referred to below. Mr Hussain alleges that the Residential Tenancy Agreements signed by the tenant are the three sent to him by the lessors’ agent in August 2002.
14) On 30 January 2003 the lessors’ agent wrote to the tenant and asked whether the tenant intended to accept the offer relating to the three fixed term leases. The letter stated if you intend to sign, please have the paperwork back to us by the 15th of February. If we have not received the signed lease by this date, we will withdraw the offer.
15) The tenant tendered at the hearing an original note from the lessors agent, dated 6 February 2003 and which reads in full:
Dear Mr Hussain,
Please find enclosed the revised contracts for 11/6 Wilkins St, as requested. All 3 copies of each need to be initialled & signed as per the instructions.
Kind regards,
Kylie.
16) Mr Hussain stated in the written application that he had Signed all three agreements and sent them back to them by post on 14 February 2003. At the hearing Mr Hussain was less that clear about how he came to sign and deliver the three leases to the agents and gave conflicting evidence that he had posted them to the agent, delivered them to the agent or alternatively signed them in the agent’s office.
17) The lessors’ agent gave evidence that their usual practice when entering into Residential Tenancy Agreements was:
a)To supply to the tenant three copies of each agreement for signature by the tenant;
b)To, upon receipt of the signed agreements from the tenant to counter sign each copy;
c)To distribute the three original copies by delivering one to the tenant, one to the owner and filing one upon the file held at their office in relation to the premises; and
d)To enter into the computer program used to manage information about properties, the dates of the expiry of the agreements and other information such as agreed future rent increase dates and amounts.
18) The written application made by the tenant included a photocopy of the third lease. This is signed by the tenant but not by the lessors or their agent.
19) During the hearing on 22 January 2007, the tenant tendered photocopies of all three agreements; each of them had been signed by the tenant on 14 February 2003. The first and second leases appear in the photocopies to bear the signature of the lessors’ agent. The third lease is signed by the tenant but not by the lessor or their agent. Mr Hussain was not able to produce any original copy of any of the three leases.
20) The lessors’ agent gave evidence that they had on their file originals of the Residential Tenancy Agreements entered into in October 2001 and the first of the agreements above, signed on 14 February 2003 for a term from September 2002 to September 2005. They did not however have copies of the second and third agreements on that file, nor any recollection, file note or other evidence that they had been received in their office at the same time as the first agreement.
21) The lessors’ agent gave evidence that they had entered into their computer system the increase in rent as agreed between the parties in relation to the first agreement but that the system did not contain any reference to increases to be paid upon the commencement of the second and third agreements. This would indicate that the first agreement for 2002- 2005 was the only agreement received and processed by the lessors’ agent.
22) The lessors agent gave evidence that in September 2005 they had informed the tenant that the lessor desired to undertake extensive renovations to the premises and that since the fixed term from September 2005 to September 2006 had expired, the lessor would like the tenants to find other accommodation. At that point the tenant produced a copy of the second agreement referred to in Paragraph 12 above and asserted that there was a fixed term tenancy in existence. The Lessors’ agent gave evidence that:
a)A search of the file in relation to the premises did not reveal any original or duplicate of the agreement;
b)Mr Hussain did not at that point reveal the existence of the third agreement nor state that the tenancy would not expire until September 2007; and
c)That the lessor decided not to contest the existence of an agreement for a further term, but indicated that the property would be required at the end of September 2006 for extensive renovation. At some time toward then end of 2006 the rent was increased to $150 per week.
23) Mr Hussain gave evidence that he had visited the office of the lessors’ agent and showed them the 2005 – 2006 agreement. He further stated that he had at that time provided a copy of the 2006-2007 agreement. In the form that it is now before the tribunal – that is, signed by the tenant but not by the lessor.
24) The lessors’ agent gave evidence that Mr Hussain had contacted them in August of 2006 asking for an extension of the lease. In support of this the agent tendered a copy of the Action & Conversation Diary kept by them in relation to these premises. It stated:
(a) 21/08/06 Mohammed rang to inform me of the hot water tap in the shower that when it is turned on the next door neighbour is banging on the wall and shouting at them to turn it off. He has also asked about the lease expiry, he would like to renew for 3-5 years. I will put this to the owner.
25) The 2005-2006 fixed term asserted by the tenant expired on 15 September 2006. The 2006-2007 fixed term asserted by the tenant commenced immediately thereafter. The rent increased from $150 to $155 under the terms of these alleged agreements. The tenant continued to pay rent at the rate of $150 per week and this continued until the date of the hearing.
26) The lessors’ agent gave evidence that Mr Hussain responded to the Notice to Vacate dated 13 October 2006 by ringing saying that he would have difficulty finding another place to live and asking for the lease to be extended. The lessors’ agent consulted the lessors and the lessor had then offered the tenant a choice: to vacate the premises in accordance with the terms of the Notice to Vacate or to stay for a further period of 6 months only, at an increased rent. On 7 December 2006 the lessors’ agent wrote to the tenant in those terms, and included a formal notice of rent increase as required by clause 38, to be effective should the tenant elect to stay for the further term of 6 months.
27) On 14 December Mr Hussain wrote to the lessors’ agent and, for the first time, asserted that a fixed term tenancy expiring in September 2007 existed between the parties. This assertion does not fit with his conduct of asking for an extension of the lease in August 2006, failing to pay the increased rent of $155 from the alleged starting date of the 2006 – 2007 fixed term or responding to the Notice to Vacate of 13 October 2006 by phoning the agent and asking for an extension.
28) The copy of the 2006-2007 agreement produced by Mr Hussain to the Tribunal is a photocopy. This photocopy shows the signatures of Mr Hussain, but there are no signatures by the lessors or their agents. Mr Hussain at no time asserts that the lessors signed this agreement or indicated in any other way that they intended to be bound to the tenancy until September 2006.
29) Taking into account, the evidence as to the usual practice of the lessors’ agents, the conduct of the tenant and Mr Hussain, the lack of an original document signed by both parties, the conduct of the lessor in giving notice informally in 2005 and formally in 2006 that the tenant should vacate the premises to allow major renovation, the Tribunal finds that there is no fixed term agreement for the period September 2006 to September 2007. The tenancy is periodic.
30) Is the Notice to Vacate dated 13 October 2006 valid?
31) Clause 96 of the Standard Prescribed Tenancy Terms provides:
(1)If there is a periodic tenancy, the lessor may serve on the tenant a notice to vacate for the following periods on the following grounds:
(a) …
(b) (e) 12 weeks notice if the lessor genuinely intends to reconstruct, renovate or make major repairs to the premises and the reconstruction, renovation or repairs cannot be carried out with the tenant living in the premises.
32) For the notice dated 13 October to be valid it must be established that:
a)A periodic tenancy exists,
b)That the notice was for a period of 12 weeks,
c)That the lessor has a bona fide intention to renovate, reconstruct or repair the premises, and
d)That those renovations, reconstructions or repairs cannot be carried out with the tenant living in the premises.
33) The Tribunal has found that there is no fixed term tenancy between the parties, and a periodic tenancy being that tenancy which exists when there is no fixed term, the first requirement of clause 96 is satisfied.
34) The period from 13 October 2006, the date of the Notice to Vacate, to 8 January, the date specified in the notice for vacation exceeds 12 weeks, therefore, the second requirement of clause 96 is satisfied.
35) The Tribunal has evidence that the lessor has expressed a desire to renovate the premises since late 2005, and that that work consisted of completely gutting and reconstructing the premises. The rent being paid for these premises is very low, and the Tribunal accepts that this reflects the poor state of repair in which the premises now stands. Further Mr Hussain attached to his application to the tribunal copies of 11 photographs which show the premises to be in a very poor state of repair and in need of extensive work, especially in the bathroom. Mr Hussain in the written application stated:
(a) We submit that given the state of repair of the premises, and the consistent failure by the lessor to carry out repairs, this [proposed rent] increase is excessive.
36) The Tribunal finds that the lessor has an real intention to renovate the premises and that those renovations will be extensive. Therefore requirements three and four of clause 96 are satisfied.
37) Therefore the Notice to Vacate dated 13 October 2006 is valid and the tenant is required to vacate the premises.
38) The Tribunal heard further evidence from the parties:
a)It is very difficult in the current market to find rental accommodation, Mr Hussain gave evidence that he was not able to find similar accommodation at a comparable rent price in the same area;
b)The tenant had been in the premises for a considerable period, and apart from frequent arrears of rent had been a good tenant, thus, the lessor did not wish to cause the tenant to be forcibly evicted pursuant to the execution of a warrant for eviction. It was agreed that the tenant should be given a further two months to vacate the premises, but that should suitable premises be found earlier the tenant should be allowed to vacate upon the giving of a short period of notice.
c)The lessor was going to renovate the premises upon vacation by the tenant and in light of the findings already made by the Tribunal did not press for an increase in rent pursuant to the notice issued; and
d)Mr Hussain indicated that he wanted to move because of the poor state of the premises and the failure by the lessor to effect repairs.
39) After discussion with the parties and taking into account the above matters the Tribunal made the orders set out above. In view of those orders there was no requirement for the Tribunal to consider the question of whether or not the rental increase was excessive.
40) The Residential Tenancies Tribunal found Mr Hussain to be an unreliable witness, he often contradicted his own evidence and was not able to give clear or consistent explanations for his conduct. Wherever there was a conflict of evidence the Tribunal preferred the evidence of the lessors’ agent.
41) The Tribunal has before it copies of the 2002 – 2005 and 2005 – 2006 agreements. On examination by the naked eye, the front page of the 2005 – 2006 agreement appears to be a document constructed by means of cutting, pasting and photocopying the front page of the 2002 – 2005 document. The Residential Tenancies Tribunal has requested the Registrar of the Magistrates Court to refer these documents to the Australian Federal Police for further investigation.
ORDERS
1. That the Residential Tenancy Agreement between the parties is a periodic tenancy, following expiration of fixed term in September 2006.
2. That the tenancy shall terminate on 19th March 2007 at 4pm. The tenant shall deliver vacant possession to the lessor at that time.
3. That the tenant may terminate prior to 19th March 2007 upon the giving of 48 hours written notice.
4. That the tenant is to pay rent of $150.00 per week until termination.
5. That the lessor is to undertake any urgent repairs in accordance with the Residential Tenancy Agreement.
Jann Lennard
Member
23 March 2007
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