Pawelzik & Popczynski v South Australian Housing Trust - [2014] SADC 182

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative Appeals Tribunal: Appeal Under Residential Tenancies Act 1995)
PAWELZIK & POPCZYNSKI v SOUTH AUSTRALIAN HOUSING TRUST
[2014] SADC 182
Judgment of His Honour Judge Clayton
6 November 2014
LANDLORD AND TENANT - RESIDENTIAL TENANCIES LEGISLATION - GENERALLY
The Residential Tenancies Tribunal found that the appellants were liable for water usage assessed by the South Australian Housing Trust and that in default of a program for payment of the debts the Trust could apply to terminate the tenancy without serving a Notice of Termination.
Held: Trust had assessed water usage in respect of premises other than the appellants'. Appellants were not liable for the debt which formed the basis of the order of the Tribunal - Cogent reason to rescind order of Tribunal.
Residential Tenancies Act 1995 (SA) s 41(1); District Court Act 1991 (SA) s 42E(3); South Australian Housing Trust Act 1936 s 30, referred to.

PAWELZIK & POPCZYNSKI v SOUTH AUSTRALIAN HOUSING TRUST
[2014] SADC 182

These two appeals from decisions of the Residential Tenancies Tribunal raise the same issue.
The appellants are tenants of the South Australian Housing Trust, which I will refer to as (‘the Trust’). In each case there is a Tenancy Agreement setting out the terms of the tenancy. Mr Popczynski entered into his Agreement on 25 November 1982 and Mr Pawelzik entered into his Agreement on 22 January 1988.
The Trust had applied for possession of the premises of each of the appellants on the ground that the tenant failed to comply with Notices of Termination for outstanding water costs. Mr Popczynski had made his own application seeking an order restoring his tenancy.
In each case the Residential Tenancies Tribunal found on 11 February 2014 that there was a debt owing by the appellants to the Trust and subsequently on 20 February 2014 ordered that the appellants pay those debts, in the case of Mr Popczynski at the rate of $20 per fortnight, and in the case of Mr Pawelzik at the rate of $10 per fortnight. The Tribunal ordered that in the event of default in the payment program the Trust could apply to the Tribunal to terminate the tenancy without serving a Notice of Termination. The appellants have appealed from all of those orders of the Tribunal pursuant to s 41 (1) of the Residential Tenancies Act 1995.
The hearing of the appeals is governed by sub-s 42E (3) of the District Court Act 1991. The appeal is in the nature of the rehearing but further evidence may be received in the Court's discretion. I must give due weight to the decision of the Tribunal and the reasons for it and not depart from the decision except for cogent reason.
The central point in the appeals is the validity of charges made by the Trust for water in respect of the appellants’ premises.
Counsel for the Trust submitted that the entitlement to charge the appellants for water arises from a combination of the lease between the parties and relevant legislative provisions.
In each case Clause 6 (f) of the relevant Tenancy Agreement provides:
6. The tenant further agrees to -
…
(f) pay to the Trust on demand the amount from time to time assessed for additional water in respect to the property, or such proportion thereof as the Trust may determine and absolve the Trust from the responsibility for payment of charges for gas, electricity or other fuel consumed on the premises and all rental and charges for telephones and other services or devices.
That provision was drafted at a time when there was a standard charge payable for water supplied to premises and an additional charge for excess water above the standard entitlement. That is no longer the case and the occupiers of property now pay a charge for all of the water which is consumed.
Section 30 of the South Australian Housing Trust Act 1936 which commenced operation on 30 June 1995, provided:
Excess or additional water
30. A provision in a tenancy agreement between the Trust and a tenant that, on the commencement of this section, provides for the tenant to pay an amount for or towards excess or additional water supplied to the premises will be taken to provide -
(a)that rates and charges for water supply are to be borne as agreed between the Trust and the tenant under a new agreement (or a variation to an existing agreement) made after the commencement of this section; and
(b)in the absence of an agreement about rates and charges for water supply under paragraph (a) -
(i) that the Trust will bear the rates and charges for water supply after the commencement of this section up to a limit fixed or determined under the regulations; and
(ii) that any amount in excess of the limit is to be borne by the tenant.
That Act was repealed from the commencement of the South Australian Housing Trust Act 1995 on 1 January 1996. A transitional provision in Clause 4 of Schedule 1 to the 1995 Act provided for a regulation under s 30 of the 1936 Act to continue in force until revoked or varied.
There were variations to that provision until 1 September 2010 when the South Australian Housing Trust Regulations 2010 commenced. Those Regulations describe the ability of the Trust to determine the proportion of water rates to be paid by tenants whose premises are connected to shared meters.
Regulation 9 provides:
9 - Responsibility for payment of water rates
Where SAHT is the landlord of premises subject to a tenancy agreement, SAHT and the tenant under the tenancy agreement are responsible for water rates payable under Part 5 of Waterworks Act 1932 in respect of the premises as follows:
(a) SAHT is responsible for payment of the supply charge for the right to a supply of water to the premises;
(b) the tenant is responsible –
(i) if a separate meter is fitted to the premises to measure the quantity of water supplied to the premises - for all water rates (other than the supply charge) payable in respect of the premises;
(ii) if no such separate meter is fitted to the premises - for the proportion (as determined by SAHT) in respect of each financial year (of all water rates other than supply charge) payable in respect of the premises.
(my underlining)
In my opinion Clause 6 (f) of the Tenancy Agreement is not applicable because the claim of the Trust is not one for excess water or additional water. I reject the submission of counsel for the Trust that the expression ‘additional water’ in Clause 6 (f) means ‘all water’. Additionally, for reasons explained more fully below, I find that the assessment made by the Trust related to 70 separate units and was not an assessment for water ‘in respect to the property’.
There is no separate meter fitted to the premises of the appellants and the claim of the Trust falls to be determined by reference to sub-reg 9(b)(ii).
The premises rented by the appellants are included in a block of 70 units. The water supplied to those 70 units is measured by 13 different meters. Until recently, it was thought that there were 14 meters servicing the block of 70 units and the charges payable by the appellants were calculated as a proportion of the charges attributable to 14 meters.
It has now been established that the 14^th meter has no connection with any of the 70 units.
In reasons published on 20 February 2014, the Tribunal Member found that the Trust combined the readings from the 14 meters into one account, that the Trust paid 30% of the combined account and that the balance was divided equally between the 70 tenants in the complex.
An officer of the Trust had given evidence that the amount contributed by the Trust (30%) was to even out the differing usage between tenants and to attempt to ensure that none of the Trust’s tenants were disadvantaged. The Tribunal was told that there are thousands of Trust tenants in premises using shared meters and the cost of providing individual meters to each of the tenants would be prohibitive.
The Tribunal Member said that after reviewing the evidence he was of the view that the appellants were liable for the water usage as assessed by the Trust. He found that approach was not inconsistent with the South Australian Housing Trust Act as amended and was in accordance with reg 9 of the South Australian Housing Trust Regulations 2010.
The Tribunal Member said that although the approach was not ideal, he was of the view that it was the most equitable means of apportioning water costs in large complexes with joint meters. He noted that although the original tenancy agreements referred to the cost of water usage in excess of 125 kilolitres that the agreements must be read in the light of subsequent legislative amendments which removed the concept of ‘excess water’ and introduced a method of assessment for premises with joint meters. He determined pursuant to s 24 of the Act that the tenants were liable for water costs as from time to time assessed by the Trust.
As I have mentioned the central point in the appeals is whether the tenants are liable for the water costs assessed by the Trust.
Ronald Alexander Lochert, an engineer employed by the Trust, has said in an affidavit that there are only 13 water meters, not 14 as previously asserted, servicing ‘the property’. The ‘property’ to which he referred is the block of 70 units. In the affidavit Mr. Lochert stated:
Accordingly SA Water has erroneously been charging water usage measured by this meter to the respondent and the respondent has been on charging this water usage to tenants. I understand that the respondent intends to rectify this situation. (Paragraph 6)
By itself that statement is sufficient to invalidate the charges for water made by the Trust in respect to the appellants’ premises. It is also sufficient to invalidate the order of the Tribunal.
Mr Lochert continued:
7. It is not possible to confirm from the Services Plan precisely which water meter services which premises on the property. The Services Plan shows only how the building was designed as at the time of construction. It does not show any alterations which may have been made since that time. Alterations can sometimes be made, for example, for the purposes of maintenance, irrigation, bypassing plumbing problems and so on. I understand, based on my general experience in working for Housing SA, that such alterations are unlikely to have been documented. Tenants were not charged for water usage at the property prior to 1 July 2008, so there would have been no imperative prior to that time for maintenance workers to ensure that pipelines were kept separated or to document any changes that may have been made.
8. The Services Plan only shows the location of the underground pipes located externally to the buildings. It does not show where pipes lead off from these main pipes, enter the building and service the dwellings inside the buildings.
9 …
10. It would take some considerable time and resources to try to determine which water meters serviced which individual premises on this property…
The result therefore is that the appellants have been required to pay 1/70^th of the total measured by 14 separate water meters, one of which has no connection with the block of 70 units at all and most of which are unlikely to have any connection with the premises of the appellants. That is, the appellants have been charged for water which was not measured by a shared meter. Some of those meters in respect of which the appellants have been required to pay a proportion of the usage was for water which was supplied to units other than an appellant’s premises.
In her argument to the Court, counsel for the Trust adopted the evidence of Mr Lochert and sought to justify the procedures of the Trust on the ground of administrative convenience.
In my opinion, for the purposes of reg 9, the ‘premises’ are the particular premises which are leased to the appellants. I refer to the wording of the regulation, in particular those words which I have underlined. Omitting irrelevant words the regulation provides:
Where SAHT is the landlord of premises subject to a tenancy agreement, SAHT and the tenant under the tenancy agreement are responsible for water rates in respect of the premises as follows:
…
(ii) if no such separate meter is fitted to the premises – for the proportion (as determined by SAHT in respect of each financial year) of all water rates (other than the supply charge) payable in respect of the premises.
(my underlining)
The regulation refers to ‘the tenant’, ‘a tenancy agreement’, ‘the tenancy agreement’ and ‘the premises.’ The argument put by counsel on behalf of the Trust that the ‘property’ for the purposes of Clause 6 (f) of the lease is the block of 70 units, not just the premises occupied by the appellants, even if correct, could not apply to reg 9.
Also it is not clear whether the amount claimed by the Trust relates to water rates ‘in respect of any financial year.’ I leave that question to one side.
The Trust has interpreted the expression ‘all water rates’ to include the rates payable in respect of premises other than the premises of the appellants. In my opinion the Tribunal Member erroneously accepted that interpretation.
Alternatively, if the expression ‘the premises’ extends to premises other than the particular premises occupied by each of the appellants, the expression ‘the premises’ should be confined to premises connected by ‘shared meters’ and the term would not include those units in the block of 70 which are connected to water meters which are not connected to the appellants’ property. That is, if my interpretation is incorrect, the proportion of water rates apportioned by the Trust from shared meters should be confined to an apportionment between properties connected to the same water meter or water meters.
The Trust has not justified the validity of the debt which it claims. In fact the admission that water usage measured by the 14^th meter has been incorrectly included invalidates the alleged debt and the underlying basis for the order of the Tribunal.
I understand the practical difficulties confronting the Trust which were explained in the affidavit of Mr Lochert and by counsel. However the convenience of the Trust does not create a basis for holding tenants liable for water usage.
The present is not a case of shared meters because the appellants are asked to contribute to water measured first, by the 14^th meter and secondly, by other meters which have no connection to the premises leased by the appellants. Meters which do not measure water supplied to the appellants’ premises are not ‘shared meters’. Charges calculated by meters which are not connected to the appellants’ premises are not ‘payable in respect of the premises’ and cannot be the subject of an apportionment by the Trust in respect of ‘the premises’.
There is a fundamental error on the face of the reasons of the Tribunal Member and there is cogent reason to allow the appeal.
In the circumstances, the orders of the Residential Tenancies Tribunal made on 11 and 20 February 2014 must be rescinded.
To the extent that it may be necessary, there will be an order in each case that the tenancy be reinstated and the appellant be given credit for any sums paid in excess of rent.