Neocleous v Dukes Real Estate Agent - [2011] SADC 83

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Under Residential Tenancies Act 1995)
NEOCLEOUS v DUKES REAL ESTATE AGENT
[2011] SADC 83
Judgment of His Honour Judge David Smith
1 June 2011
LANDLORD AND TENANT - TERMINATION OF THE TENANCY
Residential Tenancies Act - tenancy terminated because of tenant's failure to pay rent in a timely fashion - Residential Tenancies Tribunal reinstated tenancy on condition that tenant comply with a regime of orders some of which were self executing, for repayment of rent and arrears of rent - tenant made a late payment following a representation made to her by the landlord's agent that she could do so - Tribunal, without convening a hearing, made an immediate order for possession on the grounds of the late payment - tenant was evicted - tenant appealed on the basis that in not strictly complying with the order she relied upon the representation of the landlord's agent - discussion of the undesirability of making self executing orders as a matter of course - discussion of the nature and scope of an appeal pursuant to s.41.
Held: Appeal allowed, order of possession of the Tribunal quashed and tenancy reinstated on grounds that the landlord by her agent had waived and/or was estopped from insisting on strict compliance with the payment condition and therefore its breach by the tenant could not be a valid basis for ordering the tenant's eviction.
Residential Tenancies Act 1995 ss.41, 80(5), 93, 111, referred to.
Wright v Weston Raine Horne [1994] SADC 16; Ford v Gray [1988] 50 SASR 425; Jalun Pool Supplies Pty Ltd v Onga Pty Ltd [1999] SASC 20, applied.

NEOCLEOUS v DUKES REAL ESTATE AGENT
[2011] SADC 83
Introduction

This is an appeal pursuant to s.41 of the Residential Tenancies Act, 1995 (“the Act.”). I heard the appeal on 25 and 27 May 2011 and made final orders on those days. I now provide reasons for my conclusions and orders.
Background Circumstances
The Appellant was the tenant of residential premises at 6 Belgrave Avenue Flinders Park which was owned by Ms Rosemary Dirix and managed by the respondent, Dukes Real Estate (“the Agent”). The tenancy was for 12 months and commenced on 22 October 2010. The rent was $340.00 per week and was payable two weeks in advance. The Appellant was evicted by order of the Residential Tenancies Tribunal (“the Tribunal”) for failure to pay rent. In her appeal she sought reinstatement of the tenancy.
Prior to the Appellant’s eviction there had been a history of her not paying rent in a timely fashion and as a result there have been earlier proceedings in the Tribunal. It is not necessary to canvass this early history. In respect of this appeal the following are the material circumstances:
·On 7 April 2011, the Agent served a notice on the Appellant seeking payment of outstanding rent. The Appellant failed to respond to the notice. Accordingly the tenancy was terminated.[1]
[1] See s.80 of Residential Tenancies Act 1995.
·On 28 April 2011, the Agent lodged an application with the Tribunal, seeking vacant possession, a refund of the security bond and the rent owing.
·On 11 May 2011, the Tribunal heard the application. The Appellant did not attend the hearing. At the time of the hearing, arrears of rent totalled $680.00. The Tribunal mercifully declined to confirm the termination of the tenancy and instead reinstated it pursuant to s.80(5) of the Act and made the following orders:
1.     The tenancy is reinstated on condition that the tenant:
a.pays $760.00 by 5:00 PM on Thursday 19 May 2011. If this payment is not made the tenant must move out of the premises by 1:00 PM on Friday 20 May 2011.
b.pays $760.00 by 5.00 PM on Thursday 2 June 2011. If this payment is not made the tenant must move out of the premises by 1:00 PM on Friday 3 June 2011.
c.pays $760.00 by 5:00 PM on Thursday 16 June 2011. If this payment is not made the tenant must move out of the premises by 9.00 AM on Friday 17 June 2011.
d.pays $760.00 by 5:00 PM on Thursday 30 June 2011. If this payment is not made the tenant must move out of the premises by 9:00 AM on Friday 1 July 2011.
e.pays $760.00 by 5:00 PM on Thursday 14 July 2011. If this payment is not made the tenant must move out of the premises by 9:00 AM on Friday 15 July 2011.
f.pays $760.00 by 5:00 PM on Thursday 28 July 2011. If this payment is not made the tenant must move out of the premises by 9:00 AM on Friday 29 July 2011.
1       If the tenant does not make payment 1 (a) or (b) or (c) or (d) and does not move out of the premises by the time stated the landlord may lodge a statutory declaration to that effect and an up-to-date rent record. If a Deputy Registrar of the Tribunal is satisfied that the payment was not made, the bailiff will be instructed to evict anyone remaining at the premises.
2       If the tenant does not make any one of the payments 1(e) or (f) and does not leave the premises by the time stated the landlord may apply to the Tribunal for an urgent hearing to have the bailiff immediately evict anyone remaining at the premises.
3       After the above payments are made then the tenant must pay $760.00 on 11 August 2011 and then every fortnight until rent is two weeks in advance and the Tribunal application fee of $35.00 is reimbursed. If the tenant misses one of these payments the landlord may apply to the Tribunal for an urgent hearing to have the bailiff immediately evict anyone remaining at the premises.
·The Appellant did not comply with the first condition that she pay $760.00 by 5.00 pm on Thursday, 19 May 2011. I will turn to why in a moment.
·The Agent immediately lodged a statutory declaration at the Tribunal, particularising the Appellant’s failure to comply. The declaration was made on 20 May 2011.
·The Deputy Registrar, acting on the evidence constituted by the declaration, instructed the bailiff to evict the Appellant. That occurred on Monday, 23 May 2011.
·On 24 May 2011, the Appellant appealed to this Court. The substantive ground of appeal was that the Agent by its principal, Mr Rob de Jonge, told the Appellant before the payment was due, that it would be permissible for her to make the payment of $760.00 on Saturday, 21 May 2011 rather than on the Thursday, as required by the condition and by doing so had waived the necessity for the Appellant to comply strictly with the first condition imposed by the Tribunal.
Self Executing Orders
The Tribunal effectively made a battery of self executing orders. The four conditions in sub paragraphs (a) to (d) of Paragraph 1 are self executing. The fact that eviction is subject to the Deputy Registrar being satisfied that the payment was not made, does not change the character of those orders. However, breaches of the conditions in sub paragraphs (e), (f) of paragraph 1, do not automatically result in eviction, rather a hearing is required to secure any eviction.
It is clear that the Tribunal is empowered to make such conditional orders. Both ss.80 and 111 of the Act empower the Tribunal to make such orders if it considers it “appropriate…” These orders, which are universally characterised as self executing orders, are part of the armoury of the Courts in this State and in wider Australia across various jurisdictions. Making such orders necessarily involves an exercise of discretion. There has been considerable judicial comment about the considerations relevant to the exercise of this discretion. In Wright v Western Raine Horne,[2] which also concerned an appeal pursuant to s.41 of the Act, Lunn DCJ examined the authorities. Whilst acknowledging that the Tribunal is empowered to make such orders[3] at [33] His Honour said:
The survey of the above cases shows that Courts in this State have become progressively circumspect about the use of self-executing orders, although there is still a field for them to operate where parties have shown that they are not likely to fulfil their obligations and have no excuse for their delays. A growing emphasis has been placed on the need for the Courts to keep effective control of their own processes, particularly where the subject matter of the orders can have serious adverse consequences for a party. There is nothing in the Act to suggest that similar considerations should not apply in the exercise of the Tribunal’s discretion in deciding whether to exercise its powers to make self-executing orders for possession.
[2] [2004] SADC 16.
[3] See [24] and [25].
Later at [42] His Honour said of multiple self executing orders:
Generally speaking more caution should be exercised in making multiple self-executing orders than is required for a single self-executing order. The risks of an injustice to the tenant are multiplied by the number of separate conditions whose breach can activate the issue of a warrant.
In this case the Appellant alleged in her appeal notice and submissions that the Agent had excused her from complying with the strict letter of the first condition. Subject to proof, this is an example of an exculpatory occurrence which a self executing order cannot anticipate. In the event that there was a follow up hearing and subject to proof, the Tribunal would be compelled to excuse such a breach and decline to order the eviction of the Appellant. Indeed as I will make clear, the self executing order in this case has resulted in the mischief of the tenant being unjustly evicted.
I reiterate the caution sounded by Lunn DCJ in Wright v Weston Raine Horne (supra). The Tribunal should use self executing orders “… sparingly if at all…”,[4] or “… with great caution …”. [5]
[4] See Debelle J in Jalun Pool Supplies Pty Ltdv Onga Pty Ltd [1999] SASC 20 at [25].
[5] See Bollen J in Ford v Gray [1988] 50 SASR 425 at [426].
I was initially inclined to remit the matter to the Tribunal so that it could determine, as a matter of urgency, whether the Appellant’s breach should be excused or whether she should remain evicted. However, because the Appellant had already been evicted and with her two daughters was sleeping in her car, I decided urgently to investigate whether, if a hearing had been convened for the enforcement application, the Appellant’s breach would have been excused and eviction avoided.
Nature and Scope of Appeal under s.41 of the Act
First I needed to be satisfied that I was empowered, in the context of this appeal, to embark upon such a hearing.
The appeal provision Section 41 provides:
(1)An appeal lies to the District Court from a decision or order of the Tribunal made in the exercise (or purported exercise) of its powers under this Act.
(2)On an appeal, the District Court may (according to the nature of the case)—
(a)re-hear evidence taken before the Tribunal, or take further evidence;
(b)confirm, vary or quash the Tribunal's decision;
(c)make any order that should have been made in the first instance;
(d)make incidental and ancillary orders.
(3)The appeal must be commenced within one month of the decision or order appealed against unless the District Court allows an extension of time.
(4)If the reasons of the Tribunal are not given in writing at the time of making a decision or order and the appellant then requests the Tribunal to state its reasons in writing, the time for commencing the appeal runs from the time when the appellant receives the written statement of the reasons.
The nature and scope of an appeal under s.41 of the Act was also examined by Lunn DCJ in Wright v Weston Raine Horne (supra) at [9] to [23]. I adopt His Honour’s conclusion that section 41 creates “… an appeal strictly so called …”.
At [22] His Honour said:
For these reasons I construe s41 to create an appeal strictly so called which is to be determined on the evidence before the Tribunal at the time of its order together with any further evidence which the District Court in its discretion takes on matters bearing on the determination at first instance. This construction does not produce a unjust result in that it does not deprive a party of a just determination of the issues where circumstances subsequently change. Under s32(1)(f) of the Act there is power for the Tribunal to “vary or set aside an order if the tribunal considers there are proper grounds for doing so”. A similar power is also contained in s37.) That is generally a more expeditious and economical way of dealing with relevant subsequent changes in circumstances than an appeal under s41.
I turn to this appeal. The order which the Appellant challenges is the order for possession, made on 23 May 2011, by the Deputy Registrar of the Tribunal pursuant to s.93 of the Act.
In the hearing, which I conducted and which I will turn to in a moment, I was empowered by s.41(2)(a) of the Act to take into consideration on the appeal, the “further evidence …” which was available to the Tribunal at the time of the enforcement order, but which was not considered by it, because the necessary further hearing did not take place. In taking this course I have relied, in particular, on the following comments of Lunn DCJ in Wright v Weston Raine Horne (supra) at [18]:
Counsel for the intervener submitted that the power to take further evidence in s41(2)(a) meant that it was intended the District Court could take evidence of matters occurring after the Tribunal order. The phrase is ambiguous. It could merely refer to evidence of matters prior to the Tribunal hearing which were not before the Tribunal but which the District Court considers should have been acted on in making any order that should have been made in the first instance. The power of an appeal court to take further evidence was construed in this limited way in Duralla Pty Ltd v Plant (1984) 2 FCR 324 at 350 in holding that an appeal was strict in its nature, albeit that the appeal court there could act not only on what was actually before the lower court but also upon other evidence which should have been before the lower court when it made its order. I consider that s41(2)(a) has a similar limited operation here.
(the emphasis is mine).
Enforcement of possession hearing
Accordingly, on the day of hearing the appeal, namely 25 May 2011, I took evidence from the Appellant and from Alexander Spriggs, and Rob de Jonge of Dukes Real Estate.
The Appellant confirmed that following the orders of the Tribunal, she paid to the Agent the sum of $340.00 on Monday, 16 May 2011 but was unable to make the payment of $760.00 required on Thursday, 19 May 2011 because her “money” was not credited to her account until Friday. She said that she rang Mr Rob de Jonge of Dukes Real Estate on Wednesday, 18 May and following her explanation to him she said that he indicated that it would be permissible for her to make the payment to his office by Friday or Saturday. The Appellant said that she, relying upon his representation, duly paid $755.00 to the Agent’s office on Saturday, 21 May. It is to be noted that the payment was $5.00 short. However nothing turns on it.
In his evidence Mr Alexander Spriggs indicated that as far as he knew, all of what the Appellant said was correct, although he was reluctant to speak for Mr de Jonge who was his employer. At my request, Mr Spriggs telephoned Mr de Jonge in Court and I questioned him on behalf of the Appellant. He was not on oath, but he frankly admitted that what the Appellant said was true, and in particular he agreed that he had indicated to her that she could make the payment to his office on 21 May.
I unhesitatingly conclude that, whether he intended to or not, Mr de Jonge as Agent for the landlord, by his representation, had waived the necessity for the Appellant to comply strictly with the first condition of the Tribunal’s order and, as a consequence, the landlord was estopped from relying on the Appellant’s late payment as a basis for evicting her.
Accordingly on 25 May 2011, on grounds that the “further evidence” made the eviction of the Appellant unjustifiable. I allowed the appeal, quashed the Tribunal’s decision to evict the Appellant and ordered that the Agent return possession of the premises to the Appellant forthwith.
I then adjourned the Appeal to the afternoon of Friday, 27 May 2011 at which time I ordered as follows:
1That the Tribunal’s reinstatement conditions of 11 May 2011 be set aside;
2That the Appellant pay to the Agent at its Darlington premises the sum of $380.00 per week, for the next eight weeks payment to be made on each Friday.
3That in particular the payments of the said $380.00 are to be made to the said business premises of the Agent on or before 5.00 pm on each of Friday 3 June, 10 June, 17 June, 24 June, 1 July, 8 July, 15 July and 22 July 2011;
4That the said payments of $380.00 are made on account of current rent, arrears of rent, and an outstanding Tribunal fee of $35.00 and water rates of $89.57;
5That in the event of any default by the Appellant in making the eight payments set out above, the Agent, upon giving notice to the Appellant, is at liberty to apply at short notice to this Court for an urgent hearing to determine whether an order for possession should be made;
6That upon completion by the Appellant of the payments set out above, the rights as between the parties will in all respects revert to that as required by the Residential Tenancies Agreement; and
7In respect of all other matters, the Residential Tenancies Agreement will be determinative and the Tribunal in the usual way will decide any dispute between the parties.
Summary
On 25 May 2011, I allowed the Appeal on grounds that the Agent had waived the necessity for the Appellant to comply strictly with the first condition of the Tribunal’s Order. Consequently I quashed the Tribunal’s decision to evict the Appellant and ordered that she be given possession of the residence forthwith.
On the 27 May, 2011 I set aside the Tribunal’s reinstatement conditions and substituted them with the above regime of payments, to the intent that the Appellant not only pay the current rent, but also repay the arrears of the two outstanding bills.