Patrick & Naomi Cole -v- Chris Tazreiter & Karen Down
[2007] ACTRTT 5
•9 November 2006
Patrick & Naomi Cole -v- Chris Tazreiter & Karen Down ACTRTT5 [2007]
CATCHWORDS
Termination and possession application – Fair clause for posted people
LEGISLATION
Residential Tenancies Act 1997 (ACT)
Sections 8 and 9
CASE LAW
CASES CITED
CASE REFERENCE NUMBER: RT 2314 of 2006
RE: Premises at 5 Rees Place WANNIASSA ACT 2903
DECISION
ORDERS
- That the Application is dismissed.
Member: J. A. David
Date: 9 November 2006
STATEMENT OF REASONS
BACKGROUND
1 The parties entered into a residential tenancies agreement in relation to premises at 5 Rees Place, Wanniassa, in the Australian Capital Territory on 18 July 2006. The tenancy was for a fixed term of 5 months until 22 December 2006 and converted to a periodic tenancy from month to month thereafter. It was to commence on 22 July 2006.
2 On 20 July 2006 the Property Managers requested the tenants sign (and the tenants did sign) a further clause entitled “COMMONWEALTH GOVERNMENT EARLY ESCAPE CLAUSE - 2” (early escape clause-2) as follows:
“In the event of the landlord being posted back to Canberra in the course of his employment or of the tenant being posted away from Canberra (or accepting accommodation provided by the Australian Defence Force) in the course of his employment, it is hereby agreed and declared that the agreement hereby created can be terminated by either party given to the other party 30 days notice in writing of such termination.
The termination of this agreement is without prejudice to any claim by either party against the other in the respect of any antecedent breach of any convenient or condition herein contained. The amount of rent is to be paid us to be calculated on a proportional basis up to the date on which the said notice expires.
For the purpose of this clause:
A)“Tenant” means the Lessee or the principal occupant of the premises:
B)The expression “being posted away from Canberra in the course of his employment” also means:
1)DYING
2)Transferring all or substantial part of its operations from Canberra:”
3 The tenants alleged that the lessors’ Property Managers, Capital First National Real Estate, O’Connor, did not bring to their notice any ‘early escape clause” prior to the tenants signing the residential tenancy agreement on 18 July 2006.
4 A representative of the Property Managers served a Notice to Vacate on the tenants on 25 September 2007 requiring them to vacate the premises on 4 November 2007 on the basis that the owners required the premises for occupation under the above early escape clause-2. Apparently the lessor, P Cole, had been posted back to Canberra and wanted to re-occupy the premises with his family.
5 On 24 October 2006 the lessors lodged an application to this Tribunal for a termination and possession order. At the hearing on 7 November 2006 the Tribunal determined that the early escape clause-2 was void and dismissed the Application.
6 By letter dated 1 December 2006 the lessors’ Property Managers requested the following statement of reasons. The Tribunal Member who heard the matter was absent from Australia during December 2006 and January 2007. She apologises for the length of time taken to provide these reasons.
SUBMISSIONS AND EVIDENCE
Applicant Lessors’ Evidence and Submissions
7 In summary the lessors submitted that:
a) At the hearing the lessors’ Property Manager stated that the lessors were suffering severe hardship whilst the tenants remained in the premises as the lessors had returned to Canberra already and “their family was scattered all over Canberra because, as the lessors have a house in Canberra, the government would not house them”. Later the Property Manager said the lessors’ children were living with a friend in a “granny flat”.
b) In a written statement filed in the Tribunal on 3 November 2006, Andrew Kon, the representative of the Property Managers who dealt with the tenants during the negotiation over the tenancy and later, stated he had never forced the tenants to sign any form. He said he did request the tenants to sign an early escape clause at the time of signing of the lease and stated the different date on the early escape clause form was a result of the two tenants signing the tenancy agreement on different dates. Finally, Mr Kon said he had not agreed with the tenants that the eviction should not proceed.
c) Finally, the lessor’s property manager said at the hearing that the tenants had been offered a short tenancy of a house in Dickson in Canberra but she was not sure that that tenancy was still available.
8 As a result of the above, the lessors sought a termination and possession order.
Respondent Tenants’ Evidence and Submissions
9 The tenants filed written submissions on 2 November 2006 stating that:
d) There was no mention of, or request to sign, an early escape clause on 18 July 2006 when they both attended the Property Manager’s office and signed the tenancy agreement.
e) They both were “called back” to the Property Manager’s office on 20 July 2007 and “presented with such a clause and forced to sign it under duress”. The tenants alleged that a representative from the Property Manager’s Office stated the tenants would not get the keys to the property (they were to move in with their 4 children two days later) unless they signed the additional clause. The tenants further alleged the representative also said “he would get into trouble from the owner if it [the early escape clause] was not signed and that it did not mean anything” as the lessors were coming back in February and with such a short lease the clause would not be used.
f) The tenants stated at the hearing that they signed the early escape clause because their new home was due to be finished in January 2007 and they “had no where else to go” there being only two days before they were to move into the rental premises when they were presented with the clause.
g) The tenants acknowledged that a representative from the lessors’ Property Managers did make the tenants aware of Mr Cole’s threat to invoke the early escape clause several weeks before the notice to vacate was delivered. However, the tenants alleged that representative also advised them that “he disagreed with the actions proposed by the landlord, in view of the fact that they [the Coles] would be well looked after by the Department of Foreign Affairs and Trade, due to the unusual circumstances of their return to Australia”. The tenants further stated in their written submissions that they had confirmed with a DFAT officer that the Cole family could be accommodated elsewhere if they requested this.
h) The tenants pleaded that they faced extreme hardship from the eviction as their new home would not be finished sufficiently for them to occupy it though the builder was trying to finish it by Christmas. At the date of the hearing it had no kitchen and no bathroom. They said they could not find an alternative house for their family of four children (and two adults) for the 6 weeks until their new home would be ready to occupy, except one the lessors’ Property Manager had offered on the other side of Canberra which presented significant problems for their children to remain at the same school for the intervening period.
10 As a result of the above, the tenants sought the dismissal of the lessors’ application for a termination and possession order.
FINDINGS AND REASONING
Applicable Law
11 Section 8 of the Residential Tenancies Act 1997 (the Act) provides as follows:
Standard residential tenancy terms
(1) A residential tenancy agreement—
(a) must contain, and is taken to contain, terms to the effect of the standard residential tenancy terms mentioned in schedule 1; and
(b) if the lessor and tenant agree—may contain a fair clause for posted people; and
(c) may contain any other term—
(i) that is consistent with the standard residential tenancy terms; or
(ii) that is inconsistent with a standard residential tenancy term if the term has been endorsed by the tribunal under section 10.
(2) In this section:
"fair clause for posted people" means the following clause:
Termination because of posting
(1) The tenancy agreement may be terminated—
(a) if the lessor is posted to Canberra in the course of the lessor's employment—by the lessor giving the tenant at least 4 weeks written notice; or
(b) if the tenant is posted away from Canberra in the course of the tenant's employment—by the tenant giving the lessor at least 4 weeks written notice.
(2) The tenancy ends—
(a) 4 weeks after the day a notice is received under subclause (1); or
(b) if a later date is stated in the notice—on the stated date.
12 Section 8(2) above quoted provides that the words “fair clause for posted people means the following clause” and then specifies in particular detail the wording of such a clause. As the section specifies the wording of a “fair clause for posted people clause” that may be included in the standard terms of a residential tenancy agreement, the Tribunal interpreted section 8 (2) to mean that only a clause in the terms set out in section 8(2) is intended to be included within the terms of a residential tenancy agreement. Therefore, a clause not in that wording or, under section 9 of the Act a clause inconsistent with that wording, is void on both grounds.
13 Leaving aside the obvious grammatical errors and clumsy drafting, the terms of the “COMMONWEALTH GOVERNMENT EARLY ESCAPE CLAUSE - 2” clause in the residential tenancy agreement in relation to the premises in this matter are so different from the clause set out in section 8(2) of the Act that the Tribunal held the “COMMONWEALTH GOVERNMENT EARLY ESCAPE CLAUSE - 2” is inconsistent with the standard residential tenancy term provided for by section 8(2) of the Act.
14 “COMMONWEALTH GOVERNMENT EARLY ESCAPE CLAUSE - 2” provides for the expression “being posted away from Canberra in the course of his employment” to mean
1) Dying
2) Transferring all or a substantial part of its operations from Canberra”
This is clearly inconsistent with the terms of the fair clause for posted people” provided for in Section 8(2) of the Act. The Act does not provide for death to be included within a `“fair clause for posted people”, nor does it provide for “transferring all or a substantial part of its operations from Canberra” to be included within such a clause.
15 Section 9 of the Act provides that a term of a residential tenancy agreement is void if it is inconsistent with a standard residential tenancy term and has not been endorsed by the Tribunal under section 10 of the Act. There was no evidence before the Tribunal that the “COMMONWEALTH GOVERNMENT EARLY ESCAPE CLAUSE - 2” had been so endorsed.
16 The Tribunal having found that the “COMMONWEALTH GOVERNMENT EARLY ESCAPE CLAUSE – 2 was void, it did not go on to decide the question whether the tenants signed the clause under duress, nor whether the hardship provisions of section 50 of the Act were applicable in the circumstances of this matter. Each of the families involved were obviously suffering a serious degree of hardship: the lessors’ family was living in different locations in Canberra and the tenants’ family having no alternative accommodation for the approximately 6 weeks until their house was sufficiently finished for them to occupy. The Tribunal noted that the lessors did not attend the hearing to give evidence in person and their circumstances were relayed to the Tribunal by their Property Manager. If the Tribunal had had to determine the issue of hardship (which was not pleaded by the lessors) it would have held in favour of the tenants on the balance of probabilities as it had had the benefit of hearing and observing them in person. The Tribunal was satisfied that the tenants were genuine in their concerns and in the making of their claims.
17 In the circumstances the Tribunal determined that the Application should be dismissed.
ORDERS
- That the Application is dismissed.
Jennifer David
Member
8 February 2007
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