Morgan v Turner Real Estate - [2019] SADC 34

District Court of South Australia
(Civil: Minor Civil Review)
MORGAN v TURNER REAL ESTATE
[2019] SADC 34
Judgment of His Honour Judge Durrant (ex tempore)
22 March 2019
LANDLORD AND TENANT - RESIDENTIAL TENANCIES LEGISLATION - OBLIGATIONS, PROHIBITED MATTERS AND PROTECTION FOR LESSEES - RENTAL BONDS OR SECURITY DEPOSITS
Minor Civil Review
Magistrates Court found a breach of Residential Tenancy Agreement by tenant due to vacation of premises prior to expiry of term. Shortfall of rent and damages payable and bond forfeited. Tenant alleged failure to repair premises constituted repudiation by landlord and no rent or damages payable.
Held: Application for Review dismissed.
No order for costs.
Magistrates Court Act s38; Residential Tenancies Act ss 68, 85 & 88, referred to.
Northern Sandblasting Pty Ltd v Harris [1996] 188 CLR 313, considered.

MORGAN v TURNER REAL ESTATE
[2019] SADC 34
An application for review

This matter comes before the Court by way of an application to review a minor civil decision dated 3 January 2019. Regard has been had to s.38 of the Magistrates Court Act and, in particular, s.38(8) whereby this decision on review is final and not subject to appeal. As allowed by s.38 of the Magistrates Court Act, this hearing has taken the form of an inquiry by the Court into the matters in dispute between the parties rather than an adversarial contest between the parties. This Court, in undertaking this review, must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
I have heard today from both parties, who are self-represented. I commend both Mr Morgan and Ms Daken from Turner Real Estate for their conduct today and for the assistance that they have provided the Court. Both parties have indicated that there are no further matters they wish to put.
On 30 November 2015, Mr Wayne Morgan and Mrs Tyler Morgan, as tenants, entered into a Residential Property Tenancy Agreement with the landlords, Preetinder Singh and Harmita Kaur, for the lease of 5 Sunset Circuit, Walkley Heights.
The tenancy was uneventful, other than in 2017 when tree roots disturbed the paving on the pathway of the premises leading from the driveway to the front door. It is common ground that tree roots caused an unevenness in the pathway and that such issue needed to be addressed by the landlords. The tenants quite properly raised the need for repair and Ms Daken, on behalf of the property manager for the landlords, took steps to engage an arborist to advise as to how the root disturbance could be best addressed.
Advice was received to poison the root system with the expectation a composting of the roots would occur and a return to evenness of the pavers would be achieved. With the cooperation of the tenants, poison was administered to the roots in 2017. Reasonable and polite discussions continued between the tenants and manager but the problem of unevenness of the pavers remained and the approach recommended by the arborist had, by year end, not satisfactorily addressed the problem. By October 2017, the landlords were sufficiently concerned that they notified an inspection of the property to consider the issue further. The approach recommended by the arborist was maintained.
On 16 June 2018, the tenants reported to the property manager that the unevenness of the pavers had caused a visiting delivery man to trip and fall and suffer personal injury and property damage. On 17 July 2018, Mr Morgan informed the property manager that he had also sustained a fall on the pavers and had suffered personal injury. On 18 July 2018, Mr Morgan notified the property manager by email as follows:
This email is to give notice that Tyler and I will be vacating this property on 3 August 2018 and therefore breaking this lease early. This is due to the health and safety issue relating to the disrepair of the driveway and paved areas, resulting in personal and property damage. These issues have been made known to Turner Real Estate repeatedly and yet the repairs are not done and we see no sign of them being done. Right now every man, woman or child is at risk of either personal or property damage simply by entering the property. We acknowledge this early termination of the existing lease and we believe we have sufficient grounds due to the dangerous condition of the property which the owner acknowledged in January 2018 when he inspected the property. We are more than prepared to go to SACAT with this issue should Turner Real Estate contest the breaking of the lease.
The tenants then vacated the premises before expiry of the lease. After vacation by the tenants, the roots were dug up by the landlord and the unevenness of the pavers resolved. The landlords say the tenants repudiated the lease which repudiation they then accepted and that they terminated the lease and sought new tenants. They claimed the shortfall in rent and other costs. The quantum of rent and costs is not in dispute but the liability to pay was contested in the Magistrates Court.
On 17 December 2018, orders were made in the Magistrates Court that the applicants pay the respondent an amount of $4,175.36 comprised as follows:
(a) rent for the period from termination until reletting in the amount of $3,240;
(b) water usage and supply charges in the amount of $716.36 due under the lease;
(c) cleaning costs of $120 due under the lease; and
(d) costs of repair to slight damage to the property in the amount of $99.
The Deputy Registrar of the Magistrates Court, also on 17 December 2018, made an order for payment of the bond to the landlords in part satisfaction of the sum of $4,175.36.
The orders sought on this review are a vacation of the orders in relation to each of those matters and the substitution of an order that the applicant pay an amount of $120 for carpet cleaning to the respondent and the respondent pay Court costs, including the application fee for the appeal. Mr Morgan provided a Written Case and made submissions to the effect that: the applicants vacated the property to ensure the safety of occupants and anyone visiting the property; the necessary repairs required to the pavers were not made until after they had vacated the property and only after Mr Morgan experienced personal injury due to the repairs not being completed within a reasonable time; the respondents have breached their common law duty (and in doing so they rely on the decision of the High Court in Northern Sandblasting Pty Ltd v Harris [1996] 188 CLR 313); they rely on the Residential Property Tenancy Agreement and, in particular, clauses 5 and 5.1.2 of the Agreement and the Residential Tenancies Act at s.68. They say, in summary, that those breaches constituted a repudiation of the lease by the landlords which was accepted by the applicants who are now excused from any obligation to pay the shortfall rent.
In considering those contentions I have had regard to the affidavits of Mr Morgan dated 14, 17 and 22 December 2018 and his further affidavit of 2 January 2019, the Written Case that Mr Morgan has provided, as well as the matters discussed and put in the hearing today and the documents tendered in the Magistrates Court.
Clause 5 of the Residential Property Tenancy Agreement requires that the landlord must provide and maintain the property in a reasonable state of repair, having regard to its age, character and prospective life. However, the landlord will not be regarded as being in breach of the obligation to repair unless the landlord has been given written notice by the tenant of the defect requiring repair and the landlord fails to act with reasonable diligence to have the defect repaired.
The Residential Property Tenancy Agreement also contains, in clause 6, specific provisions relating to termination and refers to the fact that the agreement may only be terminated in accordance with the Residential Tenancies Act 1995.
The applicant also seeks to rely upon s.68 of the Residential Tenancies Act. Mr Morgan submitted that there was a distinction between the Residential Tenancies Act in s.68 and clause 5 of the Residential Property Tenancy Agreement, in that the Act contained a requirement that any repairs be carried out within a reasonable time.
There is no textual support in s.68 of the Residential Tenancies Act for that position. The Act requires that a term of any residential tenancy agreement be that the landlord ensure that the premises are in a reasonable state of repair at the beginning of the tenancy and keep them in a reasonable state of repair, having regard to their age, character and prospective life and has an obligation to repair upon being given notice of a defect. Section 68(2) of the Residential Tenancy Act says that the landlord will not be regarded as being in breach of the obligation to repair unless it had notice of the defect and the landlord fails to act with reasonable diligence to have the defect repaired. In my view, those provisions are mirrored in the Residential Property Tenancy Agreement.
In considering whether the landlord acted with reasonable diligence for the purposes of clause 5 of the Residential Property Tenancy Agreement and s.68 of the Residential Tenancies Act, I am satisfied that both the property manager and the landlord took the concerns of the tenant seriously and also took reasonable steps to address the problem of the uneven pavers. While it appears that the arborist’s confidence that poison would address the problem was misplaced, it is significant that expert evidence was sought and followed.
I find that for the purposes of the Residential Property Tenancy Agreement and the Residential Tenancies Act, that the landlords acted with reasonable diligence in addressing the unevenness of the pavers caused by root damage once they had been notified by the tenant, and I am satisfied that no breach of the Residential Property Tenancy Agreement or the Residential Tenancies Act has occurred.
In any event, I also note that in the event of the breach of the Residential Property Tenancy Agreement, the tenants have a right under s.85 of the Residential Tenancies Act to serve a notice on the landlord requiring repair. Section 85 of that Act also provides that if a breach is not remedied within a specified period, being at least seven days, then the tenancy is automatically terminated by force of the notice of the expiration of at least a further seven days.
Another option is for the tenant was to also apply to SACAT to end a fixed term tenancy or a periodic tenancy where the landlord had committed a serious breach of the relevant tenancy agreement. That right is contained in s.88 of the Residential Tenancies Act.
Mr Morgan has candidly and honestly indicated that he was unaware of those legislative provisions. He has also accepted that he did not give any notice to the landlord seeking the breach be remedied, and in the event it was not, that the lease would be terminated.
The decision of the High Court in Northern Sandblasting does not assist the Court in this matter in relation to whether the landlord's contractual claim should succeed. In reliance on the decision in Northern Sandblasting, the applicants contend that the respondents failed in their duty of care by failing to act within a reasonable time to make repairs to the property which led to personal injury and property damage. Further, they say that the applicants terminated the Residential Property Tenancy Agreement prior to the end date due to that property damage and personal injury caused by the failure of the respondent to make repairs within a reasonable time.
The decision in Northern Sandblasting relates to whether a non-delegable duty of care is owed by a landlord to ensure safety of premises. The case confirmed the proposition that a landlord owes a duty of care to its tenants and those who, to its knowledge, were intended to occupy the premises under and for the purposes of the tenancy. The correctness of that proposition is well established. That is, a landlord owes a duty of care if on the ordinary principles of the laws of negligence, the facts give rise to a duty. However, neither a breach of the common law or the statutory duty provides the tenants, in this case, with a defence to the claim of the landlord.
Finally, I note that the provisions of the Residential Tenancies Act are consistent with the common law duty in that if the landlord fails to, having been notified of a state of disrepair, take reasonable action to remedy the state of disrepair, then the tenant is entitled to reasonable compensation.
For these reasons I therefore dismiss the application for review and will hear the parties as to costs.