O'Connell v Southgate Real Estate

[2006] SADC 28

DISTRICT COURT OF SOUTH AUSTRALIA

(District Court Administrative Appeals Tribunal: Appeal Under Residential Tenancies Act 1995)

O'CONNELL v SOUTHGATE REAL ESTATE

Judgment of His Honour Judge Tilmouth

17 March 2006

LANDLORD AND TENANT

Residential Tenancies Tribunal dismiss tenant's objection to notice by landlord seeking forfeited bond.  Tribunal dismisses objection as being out of time.  On appeal tenant submits reason for delay and that Tribunal erred in not considering extension of time.

Held: Tribunal erred in not considering extension of time.  Appeal for extension of time is upheld.  Matter, with extension of time granted, remitted to Tribunal for fresh consideration on merits.

Residential Tenancies Act 1995 SA ss32, 41, 63, referred to.
Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257; Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628; Ulowski v Miller [1968] SASR 277; Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257, applied.
Brisbane South Regional Health Austhority v Taylor (1996) 186 CLR 541; Campbell v United Pacific Transport Pty Ltd [1966] QdR 465; Napolitano v Coyle (1977) 15 SASR 559, considered.

O'CONNELL v SOUTHGATE REAL ESTATE
[2006] SADC 28

1. In this matter the court has before it an appeal pursuant to s41 of the Residential Tenancies Act 1995 (“the Act”), sitting in its Administrative Appeals jurisdiction, from a decision of the Residential Tenancies Tribunal of 7 November 2005.  The appeal was instituted on 6 December 2005.

2. The background circumstances are that on 28 January 2005 the Tribunal reinstated a residential tenancy existing between the parties, on the condition that the tenant (appellant) paid the sum of $470 each fortnight until rent, then in arrears, was fully paid up. 

3. In another hearing of 16 February 2005, on the tenant’s application seeking a variation of that order, the parties reached an agreement that the appellant make a lump sum payment of $800 by Tuesday 22 February 2005 and thereafter fortnightly payments of $210 per week, until the rent in arrears was extinguished.  It also made those orders conditional upon the tenant giving up possession of the premises, should she fail to make both payments.

4. The hearing before the Tribunal of 7 November 2005 arose from a claim by the landlord, posted to the tenant by the Registrar of the Tribunal as required by s63(4) of the Act, to offset certain items of expenditure against the security bond lodged by the tenant under Division 4 of the Act. The Tribunal made a finding that what it called “the ten day notice” had expired on 27 August 2005. The application by the landlord to the Commissioner for payment over to the landlord pursuant to s63(1) of the Act, involved the entire sum of the bond which stood at $680. It is no doubt by reference to s63(4) that the Tribunal referred to “the 10 day notice” having expired in this matter on 27 August 2005.

5. The Tribunal went on to hold, even though the tenant had subsequently lodged an application objecting to the notice in which she sought to recover from the landlord certain items of expenditure, that notice would not be considered, because it related to “matters which properly should be raised in an application for the bond to be returned”.  The Tribunal concluded therefore, that it had no alternative but to dismiss the tenant’s application.

6. In the hearing before this Court, it became tolerably clear following submissions from both parties whom were self-represented - both of whom conducted their respective cases with commendable poise and dignity - that although on 10 October 2005 the appellant lodged with the Tribunal a hand-written statement which was capable of being a sufficient “written notice of dispute” within the meaning of the ss63(4) Act, the Tribunal would not consider the attempt to raise such dispute by the tenant, solely because the required ten days notice had expired.

7. It was also contended by the appellant that she had on an earlier date, which she could not then specify, but which must of necessity have been within a few days of 27 August 2005, sent an e-mail to the Tribunal, in effect objecting to the landlord’s notice.  At the second hearing before the Court she was able to produce a copy of that communication, printed directly from the e‑mail program on her computer.  It was as follows:-

   “From: [e-mail] [address provided]

   To: [email protected]

   Sent: Monday, August 29, 2005 5:56 PM
   my name is Esterina O’connell my security bond number is 33274406.  I wanted to dispute my bond for 3 Maturin Ave Christies Beach.  I hopr I am not too late.  I misplaced my form and I couldn’t ring out from my home phone as I live at Port Willunga and do not have std on my phone.  I rang housing trust Noarlunga, and they gave me a phone number for the T.A.B. finally and hopefully this gets through to you.  My phone numbers are 855578180 or 04044448782. and my new address is 49 quinliven road port Willunga.  Thank you. Esterina O’connell.”

8. It should be noted from enquiries made by the Court, the Tribunal only retains e‑mail correspondence for three months, before deleting or destroying them.  Just why the above e‑mail was not drawn to the attention of the Tribunal during the hearing of 7 November by Tribunal staff, is not apparent.  As this message appears entirely genuine, it is clear the appellant attempted to contact the Tribunal and make the requisite objection, just outside the 10 day period, particularly bearing in mind 27 August 2005 fell on a Saturday, and the e-mail was dispatched the Monday following.

9. The substance of the appeal relates to the failure of the Tribunal to consider the tenant’s notice of dispute at all.  Although there is no transcript of the Tribunal’s hearing, it was conceded by Ms Reed who appeared as agent for the respondent, that the appellant sought to raise this matter before the Tribunal, but as she was out of time, the Tribunal refused to consider the merits.[1]  It was also accepted that the appellant endeavoured to explain to the Tribunal why she had missed the ten day limitation, the Tribunal indicating it “wasn’t concerned with that question”[2].

   [1] Transcript 1 February 2006, p22 L28, T23 L16, T28, L13-21.

   [2] Transcript 1 February 2006, p29 L26-30 L11

10. Accordingly, upon revisiting the ruling of the Tribunal subject to the present appeal, it becomes clear that when the Tribunal determined it had no alternative but to dismiss the application, it took the view that the tenant’s claim to dispute the landlord’s application for payment over to it of the bond, was not properly before the Tribunal because it was lodged out of time. Accordingly it did proceed not to investigate the merits of the matter any further. 

11. It is not necessary to explore in detail those matters disputed by the tenant at the present time.  They relate to an air-conditioner purchased by her, some flyscreens she installed for which he seeks reimbursement, the amount of electricity she should properly be obliged to pay, the amount of water rates she was responsible for and with respect to the cost of replacement of certain curtains.  It also purports to note the combined cost or value of these items might exceed the $680 of the security bond, and in effect sought to set-off these expenses against the potential liability to forfeit the bond.  

12. When it came to the application by the landlord before the Tribunal pursuant to s63 of the Act, the Tribunal was required to consider the merits relating to the potential payment of the whole or part of the amount of the bond to the landlord, which it did. But it was also obliged to consider any dispute or objection to that application as required by s63(4) of the Act, which it did not.  It does not appear the Tribunal was against the appellant on the grounds of form of the notice of dispute of 10 October 2005; rather since it was outside the ten days “after the date the notice [was] given to the respondent”[3] it simply lacked the jurisdiction, or at least the power to determine the matter any further. It appears thereafter the Tribunal was prepared to regard the letter of 10 October 2005 as a sufficient notice of objection, but was against the appellant on the issue of time. There was a suggestion by Ms Reed during argument before the Court, that the Tribunal indicated that if it considered the notice of dispute in the circumstances, there would be “floods of claims of a similar nature”[4]. 

    [3] S63(4) of the Act.

    [4] Transcript 1 February 2006 p28L20-L21

13. The Tribunal is empowered when hearing and considering matters coming before it under the Act, to “conduct its proceedings with the minimum of formality” without being bound by the rules of evidence, and to inform itself as it thinks appropriate[5]. More importantly, it had express statutory remit pursuant to s32(1)(e), to “extend a period prescribed by or under this Act within which an application or other step in respect of proceedings must be made or taken (even if the period had expired)”. That is a power which the Tribunal did not consider or turn its mind to, still less did it exercise, in relation to this matter, and in failing to do so, it erred. The discretion to extend time for any step to be taken or period prescribed, necessarily applied to the ten day period applicable to the notice of dispute to the application for payment to the landlord for the amount of the security bond pursuant to s63(4) of the Act.

    [5] S32(2).

14. An unfettered discretion is vested by s32(c)(e), but one which is a necessary component of the proper and full discharge of the jurisdiction of the Tribunal, when considering any application to which its terms are attracted.  In failing to consider that course in this case, or if it be the case as a matter of policy because it might open the “flood gates”, either is an erroneous view of the powers and functions of the Tribunal in general, and of its application to the facts of this case, in particular.

15. When exercising the power to extend time under s32(1)(e), the Tribunal ought to consider a number of well established principles which would assist and guide it when those provisions come into play. Like all such provisions, they are there for the sole purpose of doing justice between the parties[6]. That power must be exercised in the light of the informal procedures it adopts, unrestrained by the rules of evidence[7].  There are no statutory pre-conditions to the exercise of the power to extend time and the discretion is not one to be tethered by absolute or inflexible rules.  The broad purpose of the power to extend is to eliminate injustice a party might suffer by reason of the imposition of a rigid time limit[8].

    [6] Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257.

    [7] ss32(2).

    [8] Sola Optical Australia Pty Ltd v Mills (1987) 163 CLR 628.

16. In that context, when considering whether to extend a period prescribed by the Act, or for the taking of any step in respect to proceedings, the Tribunal would necessarily have regard to all of the circumstances, including those suggested by Bray CJ in Ulowski v Miller[9], in particular the length of the delay, the explanation for the delay, the hardship to the party concerned if the application is dismissed, the prejudice to the party resisting an extension and the conduct of the parties in the proceedings.

    [9] [1968] SASR 277 at 283 (see also Napolitano v Coyle (1977) 15 SASR 559, 571)

17. When exercising the power vested by ss32(1)(e), the Tribunal should also bear in mind it remains for an applicant to satisfy it that grounds exist for exercising the discretion in his or her favour, and that there is an evidentiary onus on a respondent to raise any consideration telling against the favourable exercise of the discretion to extent time: Brisbane South Regional Health Authority v Taylor FL[10].

    [10] (1996) 186 CLR 541 (see also Campbell v United Pacific Transport Pty Ltd [1966] QdR 465)

18. Were the Tribunal told of the e-mail dispatched by the appellant on 29 August, and should it have turned its mind to the power vested by s32(1)(e) to extend the time for the giving of the “10 day notice” under s63(4). Given both the explanation for falling outside that period and the fact that the e‑mail was received the next working day following expiry, the proper order of the Tribunal could only have been to allow the e-mail to stand as a valid notice of dispute under that section. In that event it would then be compelled to determine the merits of the objection – a process it did not embark upon at the hearing of 7 November 2005.

19. This Court is empowered to rehear evidence taken before the Tribunal[11], but since the issues relating to the substantial objection as not conversed before the Tribunal, it would not appear appropriate to consider that matter afresh now.  In any case, it is probably best for the specialised Tribunal to consider the issues on the merits in the first instance.  Likewise, although the Court is entitled to make any order that should have been made in the first instance[12], it would not be appropriate for the Court to embark upon that exercise now either.

    [11] Ss32(2),41(2)(a).

    [12] S41(2)(c).

20. However, as the Tribunal has erred as a matter of law in failing to consider or exercise the power vested in it to grant an extension of time with respect to the notice of dispute, the appropriate order is for the Court to quash the decision of the Tribunal pursuant to s41(2)(b)[13] and remit the matter to the Tribunal for re-consideration. The Court further directs the Tribunal to grant an extension of time pursuant to s32(1)(e) of the Act to the tenant in which to give a written notice of dispute to 29 August 2005, and with the further direction that it treats the e‑mail of that date as a sufficient notice for that purpose.

    [13] s42F(c) of the District Court Act 1991.

21. It should be clear from these reasons, the issues the Tribunal is then bound to consider, are the landlord’s application pursuant to s63(1) of the Act and the tenant’s notice of dispute pursuant to s63(4) thereof.

22. As the Court is not empowered to make orders for costs in relation to these matters, unless it considers “such an order to be necessary in the interest of justice”[14], the error being one made by the Tribunal rather than the parties, there is no basis for making an order as to costs in favour of or as against either party to this appeal.

    [14] S42H of the District Court Act.

23. The formal order of the Court therefore is the decision of the Residential Tenancies Tribunal dated 7 November 2005 is quashed, the landlord’s application for repayment of the security bond pursuant to s63 of the Act and the tenant’s notice of dispute pursuant to s63(4) of the Act of 29 August 2005, are both remitted for re-consideration before the Tribunal, constituted by a different member. 

[2] Transcript 1 February 2006, p29 L26-30 L11