Purelli v Rada & Anor (Residential Tenancies)
[2022] ACAT 107
•20 December 2022
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
PURELLI v RADA & ANOR (Residential Tenancies) [2022] ACAT 107
RT 749/2022
Catchwords: RESIDENTIAL TENANCIES –application for termination and possession order by lessor – where application purports to engage more than one head of power – failure to take care of premises – where evidence does not show whether identified failures were remedied – failure to pay for water consumption – where notice defective in identifying amounts owed – power to correct defects in notice – power does not extend to identified defects – rental arrears – where notice was made under a different provision and failed to include required particulars – application dismissed
Legislation cited: Electronic Transactions Act 2001 ss 7, 8
Residential TenanciesAct 1997 ss 48, 49, 50, 59, 83, 133, standard terms 26, 46, 61A, 63, 75, 76, 77, 78, 79, 80, 81, 81A, 82, 83, 92, 93, 96
Subordinate
Legislation cited: Residential Tenancies Regulation 1998 s 5
Cases cited:Commissioner for Social Housing v Pesi [2015] ACAT 58
Commissioner for Social Housing v Woodward [2016] ACAT 85
Devenport v Commissioner for Housing in the ACT [2007] ACTSC 30
Leon Fink Holdings Proprietary Limited v Australian Film Commission [1979] HCA 26
Pye v Argyle Community Housing [2021] ACAT 84
Tribunal:Senior Member M Hyman
Date of Orders: 20 December 2022
Date of Reasons for Decision: 20 December 2022
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 749/2022
BETWEEN:
SUMANTH REDDY PURELLI
Applicant/Lessor
AND:
ALENA RADA
First Respondent/Tenant
JACOB REICH
Second Respondent/Tenant
TRIBUNAL:Senior Member M Hyman
DATE:20 December 2022
ORDER
The Tribunal orders that:
The application is dismissed.
………………………………..
Senior Member M Hyman
REASONS FOR DECISION
Introduction
This decision is about whether a termination and possession order should be granted for the premises owned by the applicant/lessor, Mr Purelli, and whether in addition the respondents/tenants, Dr Alena Rada and Mr Jacob Reich, should pay arrears of rent, amounts owed for water consumption, and compensation for cleaning of and repairs to the property.
On 26 September 2022, the applicant applied under the Residential Tenancies Act 1997 (the RTA) for a termination and possession order. The matter came before me on 14 November 2022. The lessor was represented by Mr Andrew Chakrabarty of Adero Law. The respondents, Dr Rada and Mr Reich, who are mother and son, appeared in person. The lessor provided in support of his case a bundle of material comprising the tenancy agreement, a witness statement by Ms Serene Teoh, Director of Trusted Realtors, the agents for the property, with attachments, a compilation of arrears notices for rent and water consumption charges, notices to remedy and notices to vacate served on the tenants at various times, a collection of photographs of the interior and exterior of the house, taken at an inspection carried out in November 2021, and the ledger for the tenancy maintained by the agents. The tenants provided a bundle of material contesting statements of fact by Ms Teoh and others and taking issue with the arguments raised against them. During the hearing, Mr Chakrabarty tendered two notices to remedy, one dated 16 April 2021 (Exhibit R1), the other dated 20 October 2022 (Exhibit R2), and a ledger for the premises updated to 1 November 2022 (Exhibit R3).
Ms Teoh appeared in person as a witness for the lessor. Dr Rada gave evidence for the tenants. Mr Reich was willing to give evidence but said he could not add to Dr Rada’s, and Mr Chakrabarty, having cross-examined Dr Rada, said he had no further questions to ask.
The legal framework
The RTA provides the framework for rental tenancies in the ACT. The Act sets out a range of governing provisions and provides for application to be made to the ACT Civil and Administrative Tribunal (ACAT) for resolution of tenancy disputes. Schedule 1 to the RTA sets out just over 100 standard terms, which become the terms of the tenancy agreement between lessor and tenant – that is, they are the terms of the contract between them. These terms variously add to, reinforce, and supplement the provisions of the Act itself.
Issues
The issues for resolution in the present matter are:
(a)whether any grounds for a termination and possession order against the tenants are established by the available evidence;
(b)if so, whether such an order should be made;
(c)whether an order for payment of compensation to the lessor should be made; and
(d)if so, the quantum of that order.
The facts of the matter
The application brought by the lessor seeks a termination and possession order, payment of rental arrears and unpaid utilities charges, and compensation. Mr Chakrabarty said at the hearing that the application could be considered under three separate sections of the RTA, in that the evidence might enliven three of ACAT’s heads of power: section 48 (termination for breach other than failure to pay rent), section 49 (termination for failure to pay rent) and section 50 (significant hardship). In the event no specific evidence was advanced in respect of the section 50 head of power and the matter was not pressed (and in any case, an application under section 50 can only be brought under a fixed-term tenancy, and the tenancy in this matter is presently periodic rather than fixed‑term).
The tenants entered into the residential tenancy agreement on 5 December 2019. The agreement was for a fixed term of two years with rent set at $550 per week. The tenancy agreement transitioned to a periodic agreement on 8 December 2021.
An inspection was carried out on the premises on 5 November 2021. The report of that inspection was in evidence, dated 7 November 2021, under the name of Mr Sean Joliffe. The report concluded that in general the property was in a very poor state. The specific problems identified were that the carpet was stained and marked; there was an unpleasant odour in the property; that there were a great many cobwebs; that there was significant presence of mould in the property; that the garden needed pruning and cutting back; that there was a great deal of rubbish and clutter outside the house; that there was dog fur and dog faeces just outside some doors; that the kitchen badly needed a clean; and that there were marks on and holes in some walls. A notice to remedy was issued to the tenants on the basis of that inspection, but no further inspection has since been carried out.
Dr Rada and Mr Reich each contributed to the rent each week. The ledger for the premises, updated by Exhibit R3 to 1 November 2022, shows that the tenants kept pace, by and large, with their rent for the early part of their tenancy, falling behind occasionally for short periods, and by comparatively small amounts. Mr Reich explained that later in the tenancy he lost his employment during the COVID-19 epidemic and found it difficult to maintain his rental payments. The ledger shows that the tenants developed a practice of paying part of the rent rather than all of it with the result that the ledger shows a gradual accumulation of arrears. The agents sent out arrears notices from time to time, in most cases stating the number of days that the rent was in arrears and the amount owed. These notices were among the evidence provided by the applicant and show the arrears as follows:
Date of arrears notice Days in arrears Arrears ($) 30 May 2020 5 498.84 28 August 2020 21 2,124.80 3 September 2020 24 1,724.80 22 September 2020 29 2,444.80 28 October 2020 24 2,694.80 1 March 2021 42 2,833.09 30 March 2021 50 3,933.09 16 April 2021 Not specified 4,073.09 28 April 2021 Not specified 3,523.09 20 July 2021 50 4,023.09 20 April 2022 107 8,737.38
Some of the arrears notices also included an amount owed by way of “fees”, explained as the amount owed for water consumption. The pattern of amounts owed is as follows:
Date of arrears notice Amount owed ($) 30 May 2020 368.11 28 October 2020 198.24 28 April 2021 878.06 20 July 2021 1,075.62
The arrears notice dated 1 March 2021 took the form also of a notice to remedy, and that was followed by the notice dated 16 April 2021 as a notice to vacate, with 1 May 2021 set as the date by which the tenants were to vacate the premises; the requirement to vacate by 1 May 2021 was reiterated in the arrears notice of 28 April 2021. The arrears notice of 20 April 2022 was also in the form of a notice to remedy, and it was followed by a notice to vacate dated 15 August 2022. That notice was given under standard term 93(d) of the RTA and identified three breaches of the tenancy agreement:
(a)a failure to pay for water consumption as required under standard term 46, detailing the total owed as $1,339.07;
(b)a failure to pay rent, as required under standard term 26(1), with six failures documented, amounting to $1,696.43; and
(c)a failure to take care of the premises, as required under standard term 63(c).
The evidence of Ms Teoh was that the agency of which she was Director, Trusted Realtors, had had an ongoing problem with the tenants for an extended period. The major concerns with regard to the tenancy were the rental arrears, the amounts owed for water consumption and the condition of the premises. There was also a problem of access to the premises: it was very difficult to negotiate an agreed day and time for inspections and for tradesmen to enter the premises to undertake maintenance. Ms Teoh’s evidence was supported by a statutory declaration dated 21 July 2021 by a former employee of Trusted Realtors, Mr Pakho Yip (also appearing in the papers as Mr Paco Yip). I gather that Mr Yip had acted as the agents’ main point of contact for the tenancy and made the statutory declaration when he came to leave employment with the agency.
Consideration
It is readily apparent from the evidence that there is a range of problems with the tenancy. The condition of the premises and the inspection in November 2021 suggests that at least at that time that the condition of the premises was an issue, but perhaps more compelling is the evident difficulty that the tenants are having in maintaining rental payments. That problem seems to have become more severe in recent months. Indeed, it appears that the tenants are living in premises the rent for which is beyond their present means.
That said, the question remains whether the action taken by the lessor establishes a basis for the orders he is now seeking. The RTA is structured so that an applicant wishing to obtain a termination and possession order, under normal circumstances, must lay the groundwork for it by going through a process set out in the relevant standard term; after a notice to vacate has been given to the tenant, and if the tenant fails to vacate the premises in accordance with the notice, the lessor may apply to the ACAT for a termination and possession order. In some but not all cases, a notice to remedy must precede any notice to vacate with detailed timelines prescribed for both kinds of notice. A provision of the RTA itself then sets out how the powers of the ACAT are enlivened in respect of an application for termination and possession. Thus, each standard term that deals with a ground for terminating a tenancy has a corresponding provision of the RTA that confers the power to make a termination and possession order on the ACAT and sets out how the power may be exercised and under what conditions. The conditions that must be met for the power to be enlivened differ from one provision to another, as does the discretion conferred on the ACAT. For that reason, it may be difficult for a single notification and application process to meet the requirements of more than one provision of the RTA. Pye v Argyle Community Housing[1] illustrates the challenges that can ensue when more than one provision of the RTA is engaged by a single application (in that case several notices were issued simultaneously under different terms, leading to ambiguity about which provision of the RTA the application was made under).
Breach other than failure to pay rent
[1] [2021] ACAT 84
In the present instance, the lessor pressed the application under section 48 of the RTA which provides for termination of a tenancy for a breach of the tenancy agreement other than for failure to pay rent. The section, so far as is relevant, reads as follows:
Certain breaches of standard residential tenancy terms
(1) On application by a lessor, the ACAT may make a termination and possession order if—
(a)satisfied that—
(i)the tenant has breached the standard residential tenancy terms (other than by failing to pay rent that has become payable); and
(ii)the lessor has served a termination notice on the tenant based on the breach; and
(iii)the tenant did not vacate the premises in accordance with the notice; and
(iv)the breach of the standard residential tenancy terms was not in accordance with a term of the residential tenancy agreement endorsed by the ACAT; and
(v)the breach justifies the termination of the tenancy; or
…
(2) The ACAT may, if satisfied that it is appropriate and just to do so in relation to an application mentioned in subsection (1)—
(a)refuse to make a termination and possession order if—
(i)the tenant has remedied the relevant breach; or
(ii)the tenant undertakes to remedy the breach within a reasonable specified period and is reasonably likely to do so; or
(b)make a termination and possession order but suspend it for a period of no more than 3 weeks if satisfied that—
(i)were the order not suspended for a specified period of no more than 3 weeks the tenant would suffer significant hardship; and
(ii)that hardship would be greater than the hardship that would be suffered by the lessor if the order were suspended for the specified period.
The corresponding standard term is 93, which reads as follows:
Termination of tenancy for breach other than nonpayment of rent
The tribunal may order the termination of the tenancy and eviction of the tenant on the ground of breach of the tenancy agreement in the following circumstances:(a) the lessor must serve a written notice requiring the tenant within 2 weeks after the day of service to remedy the breach if it is capable of remedy;
(b) if the breach is not remedied within 2 weeks after the day of service or if the breach is not capable of remedy—the lessor must give a notice to vacate the premises within 2 weeks after the date of service of the notice to vacate;
(c) if the tenant does not vacate the premises within the period of 2 weeks after the date of service of a notice to vacate—the lessor may apply to the tribunal for an order terminating the tenancy and for the eviction of the tenant;
(d) if the tenant breaches the terms of the tenancy on 3 occasions on any ground—on the 3rd occasion the lessor may serve a notice to vacate and need not give the tenant 2 weeks to remedy the breach.
In the present circumstances, the lessor has identified the notice to vacate as falling under paragraph (d) of standard term 93, the three breaches being failure to pay rent, failure to pay for water consumption and failure to take care of the premises. Standard term 93 is intended to provide for breaches other than non‑payment of rent, and that is even clearer from the drafting of section 48 of the RTA which specifies in section 93(1)(a)(i) that the breach must be “other than failing to pay rent that has become due and payable”. The wording of standard term 93(d), however, includes the phrase “on any ground”. On its face that appears to imply that at least one of the three breaches making up the three that trigger the right to issue a notice to vacate without first issuing a notice to remedy may indeed be a failure to pay rent; but the breach that provides the ground of an application to the ACAT must be some breach other than a failure to pay rent, in line with the wording of section 48. An alternative reading is that the reference to a breach “on any ground” is intended to be limited to breaches other than a failure to pay rent, in line with the heading to standard term 93. As there have been several failures to pay for water consumption, I think the requirement that there be three breaches is met under either reading. Nevertheless, the rental arrears owed by Dr Rada and Mr Reich, even if those arrears can contribute to the three breaches required, cannot be the basis for an application under section 48 of the RTA.
One of the grounds in the notice to vacate is the alleged failure to take care of the premises. A notice to remedy was given to the tenants on 7 November 2021, and the photographic evidence provided with the lessor’s bundle of material certainly suggests that at the time of inspection in November 2021 the care of the house might have left something to be desired. But there are a number of obstacles to this being a ground for the application. In the first place, the inspection took place more than a year ago. I have no evidence about the state of the premises currently, nor do I know what the tenants might have done to remedy the problems identified at the inspection. That evidence is necessary to establish that the notice to vacate was validly issued; it would not be a valid notice if the tenants had remedied the problems identified in the notice to remedy. The evidence of the premises as they are presently is also needed in applying the criteria set out in section 48 of the RTA, to form a view about whether the breach justifies the termination of the tenancy, a step necessary before the discretion conferred by section 48 is enlivened. And, if the discretion is enlivened, knowledge of what has been done or is promised by way of remedy, is required for the proper consideration of whether nor not to exercise the discretion in section 48(2)(a).
Further, the tenants contest much of the evidence about the damage to the property and its causation: they say that the mould, for example, persists or returns in the premises despite their best efforts at ventilation; that there was one small hole in one wall caused when a tradesman allowed a door handle to strike the wall, and that hole has now been patched and painted; they say that the carpet is old, and that at least some of the stains arose from a leaking toilet which the lessor was slow to repair. Once again, to form a view whether the breach justifies the termination of the tenancy, it would be helpful to have evidence that persuasively shows that the tenants were responsible for a deterioration in the condition of the house. I do not have that evidence; for example, there are no recent photographs, and no “before and after” photographs showing the condition of the house at the start of the tenancy and at present. In summary, I do not know the present condition of the premises, I do not know if the tenants have taken action to remedy the problems identified a year ago, and if there has been damage done I cannot form a view about how it was caused and who, if anyone, caused it. The application cannot succeed on the basis of the failure to care for the premises.
That leaves the failure to pay for water consumption. The debt for water was given as $1,339.07 in the notice to vacate of 15 August 2022. Not to pay for water consumption is a breach of standard term 46, which makes the tenant responsible for utilities consumption charges, including water. I am persuaded from the agents’ ledger that Dr Rada and Mr Reich have failed to pay what they owe for water consumption, and that they have therefore breached standard term 46. This meets the requirement of standard term 93(d), in that the tenants have breached the tenancy agreement multiple times by non-payment for water consumption, and the lessor has served a notice to vacate.
I am satisfied, then, that the terms of section 48(1)(a)(i) have been met: the tenants have breached their tenancy agreement other than by failing to pay rent, by breaching standard term 46. In terms of section 48(1)(a)(ii) the lessor has served a termination notice on the tenants based on the breach (the notice refers to more than one breach, but the breach of standard term 46 is among those referred to); but it is also necessary that the notice to vacate is properly worded and was properly served.
Regarding service, I note that the evidence of Ms Teoh was that the notices to remedy were served by email and the notices to vacate were given by hand, with the transaction documented photographically. Under sections 7 and 8 of the Electronic Transactions Act 2001 service by email is valid if the recipient consents to receiving notices electronically. The residential tenancy agreement between the lessor and tenants shows that each tenant put their email address as the address for service of notices, thus impliedly consenting to be served by email. Under section 5 of the Residential Tenancies Regulation 1998, service in person is an accepted form of service. The photographic record of the service of the notice to vacate was not in evidence, but service in person is designated as the method of service in the tenancy agreement, Ms Teoh gave evidence that the notice was served in that way, and the tenants offered no challenge to that evidence. I am satisfied that the notices to remedy and to vacate were validly served.
Regarding the wording of the notice, the amount owed for water consumption was given as $1,339.07, made up of the following amounts:
Date of invoice Invoice number Amount ($) 15 April 2021 3260 543.40 8 October 2021 4050 194.19 13 January 2022 4439 181.26 8 April 2022 4787 263.19 13 July 2022 5197 157.05
The amounts cited above include some errors, however. In the first place, the amount for the first invoice, number 3260, is short one digit and also contains an erroneous digit; the amount of that invoice, from the ledger, was $544.48. Second, the tenants made a payment against that invoice: Dr Rada paid $100 on 11 August 2021, and Mr Reich paid $333.58 on 7 September 2021, reducing the debt amount (assuming the invoiced amount was $544.48) to $110.90. The fifth invoice, number 5197, was fully paid on 12 August 2022. This means that the amount owed for water consumption was not $1,339.07, but rather $749.49.[2] The payments mentioned above were made late, but they were made, nonetheless.
[2] The amount the notice shows as owed under the third invoice, number 4439, correctly reflects the payment of $100 made against the invoice on 11 February 2022 (the invoice was for $281.26).
Standard term 83 specifies what is required in a notice to vacate:
The notice to vacate must be in writing, in the form required by the Residential Tenancies Act, and must include the following information:
(a) the address of the premises;
(b) the ground(s) on which the notice is issued, together with sufficient particulars to identify the circumstances giving rise to the ground(s);
(c) that the lessor requires the tenant to vacate the premises by the expiry of the required notice period and that the tenancy ends on the day that the tenant vacates the premises.
In presenting the amounts owed for water consumption with substantial errors, and especially in failing to recognise payments made against the amounts owed, in my view the lessor has not issued a notice with the “sufficient particulars to identify the circumstances giving rise to the grounds” as required by paragraph (b) of standard term 83.
The RTA provides, in section 59 and also in section 83(k), that the ACAT may correct certain defects in notices or in their service. Section 59 allows a lessor to apply to the ACAT for waiver of a defect in a termination notice where the notice is not in the form approved under section 133 of the RTA or not served as prescribed by regulation, and the tenant has not vacated the premises. Section 83 confers on the ACAT a more general power allowing correction of a defect in a notice or service of a notice.
The power in section 59 is clearly more specific than that in section 83, in that it is confined to termination notices served by a lessor. In Devenport v Commissioner for Housing in the ACT[3] the Supreme Court noted that:
It seems to us that this apparently general form of power ought not be so read as to render nugatory the specific distinction that the legislature has drawn between s 48 and s 49. Where there is an apparent conflict in a statute between a general and a specific provision, the specific provision will prevail. This is a well-settled approach to statutory construction sometimes expressed by the maxim generalia specialibus non derogant.
[3] [2007] ACTSC 30
The court (Higgins CJ, Gray and Connolly JJ) went on to cite the following passage from Leon Fink Holdings Proprietary Limited v Australian Film Commission:[4]
It is accepted that when a statute confers both a general power, not subject to limitations and qualifications, and a special power, subject to limitations and qualifications, the general power cannot be exercised to do that which is the subject of the special power.
[4] [1979] HCA 26, at [10] (Mason J, Barwick CJ and Aickin J agreeing)
That doctrine means that the general power to correct notices in section 83 cannot be used to correct termination notices served by a lessor on a tenant. For that, the power in section 59 must be relied on. And the power in section 59 is limited to the correction of the form used in the notice, or the service of the notice. As mentioned earlier, I am satisfied that no defect arises in the service of any of the notices served on the tenants by the lessor in the present matter; and the error in the notice identified above is not in the form of the notice but in its substance, suggesting that the corrections power in the RTA may not be used to overcome the defect identified.
In Commissioner for Social Housing v Woodward[5], the Tribunal (Senior Member (SM) Robinson), faced with a similar issue, concluded that the power in section 59 could not or at least should not be used to correct errors in the contents of a notice, where the amount owed by a tenant was significantly misstated (in that case, the correction of a notice to remedy was at issue):[6]
… the purpose of a notice to remedy or a notice to vacate is to advise the tenant that they are doing something that is putting the tenancy at risk …, and to give the tenant an opportunity to take steps to correct that conduct …. The notice should specify what needs to be remedied with sufficient particularity to allow the tenant to know what has to be done. If a notice does not do this, or if it misleads the tenants as to what they need to do to fix their situation, it should not be corrected, even if this means that the lessor must start again…
[5] [2016] ACAT 85
[6] Commissioner for Social Housing v Woodward [2016] ACAT 85, at [25]
SM Robinson continued by citing a comment to similar effect by SM Lennard in Commissioner for Social Housing v Pesi:[7]
If a notice to remedy, or a notice to vacate served upon the tenant contains a defect which could readily mislead the tenant about an essential element of the breach that had to be remedied, so that the decision as to what action they should take is influenced by the defective information, then taking into account the serious consequences (potential homelessness) for the tenant, the Tribunal should be extremely cautious about correcting a defect in relation to the quantum of arrears, said to be owed by the tenant.
[7] [2015] ACAT 58, at [38]
At the hearing of this matter, some of the difficulties in the wording of the notice were the subject of discussion between Mr Chakrabarty and myself, so he was aware that there might be an issue with the notice. But he did not make an application to me under section 59 for correction of any defect.
Thus, the error in the notice, whereby the sum asserted to be owed for water consumption is greater than that disclosed by examination of the ledger, will not be corrected. No application to do so has come before me; in any case I do not believe the power in section 59 extends to the kinds of errors to be found in the notice that is at issue in this matter; and for reasons similar to those raised by SM Robinson and SM Lennard in the cases quoted above, I would not be disposed to correct the errors even if I had the power to do so. As a result, my conclusion is that the notice to vacate does not provide a valid basis for an application under section 48 of the RTA in respect of the unpaid water consumption charges.
Perhaps aware of the limitations of the lessor’s case, Mr Chakrabarty raised two other points which I understood to be in the alternative to the case as set out above. First, he suggested that the obstacles raised by the tenants to access to the premises constituted multiple breaches that helped justify termination. Quite apart from the evident procedural issues this raises (it has not been part of the notice process), there is another more fundamental problem. Nothing in the RTA, including in the standard terms, creates an obligation in a tenant to grant access to a lessor, except for standard term 81A, which requires that a tenant “not unreasonably refuse” access by a prospective purchaser. Certain rights of access are granted to lessors, for example section 61A allows a lessor to enter premises to confirm abandonment, standard term 77 allows a lessor to conduct two routine inspections per year, and standard term 78 allows an inspection at the beginning and end of a tenancy. Terms 80, 81 and 81A deal with access for prospective purchasers and new tenants, and term 82 allows access to a lessor for making and inspecting repairs. But apart from the limited (and presently irrelevant) exception already referred to in standard term 81A, no obligation is created for a tenant to grant access, and hence no breach of the agreement results from a tenant who makes access difficult for a lessor. Standard terms 75 and 76, which impose general constraints on a lessor’s right to enter the premises, make it clear rather that the tenant’s possessory rights to the premises under law are to be protected. The solution, for a lessor who is denied access, is to make use of standard term 79, which allows a lessor to apply to the ACAT for an access order. Mr Purelli has not availed himself of that option.
The other argument put by Mr Chakrabarty was that the tenants, in giving evidence, have acknowledged the deficiencies in the premises – for example, Dr Rada noted that the carpet was stained and that there was a problem with persistent mould. It was appropriate therefore for a termination and possession order to be granted to allow renovation to address these problems, the existence of which was not at issue. The RTA does provide for a lessor to seek a termination and possession order in order to undertake renovations that require that the premises be unoccupied. Standard term 96(1)(e) allows for a lessor, where there is a periodic tenancy, to issue a notice to vacate to a tenant giving 12 weeks’ notice where such renovations are to be undertaken. But Mr Purelli has not given a notice that conforms to that standard term.
Neither of Mr Chakrabarty’s additional arguments assists in remedying the deficiencies in the application under section 48 of the RTA.
Failure to pay rent
In the alternative, the lessor is pressing the application under section 49, which deals with applications for termination and possession where a tenant fails to pay rent. It is clear that the tenants in the present matter have had considerable difficulty paying rent and are now well and truly in arrears. A number of notices to remedy have been served on them, and the notice to vacate considered earlier in this decision not only referred to failures to care for the premises and to pay for water consumption; it also referred to failure to pay rent as one of the grounds for the notice.
Standard term 92 of Schedule 1 to the RTA deals with failures to pay rent. It sets out a detailed and prescriptive notice process, but in paragraph 92(f) states that “during any tenancy in which the lessor has previously issued 2 notices to remedy, the lessor may serve a notice to vacate 1 week after the day when the rent has fallen due without serving a notice to remedy”. There were notices to remedy issued during the tenancy, on 1 March 2021 and 20 April 2022 and the notice to vacate was issued on 15 August 2022.
A lessor faced with a tenant who has not paid rent may apply to the ACAT under section 49 of the RTA. That section applies if a tenant has failed to pay rent, the lessor has issued a notice to vacate, and the tenant has not vacated the premises.[8] The lessor may in those circumstances apply to the ACAT for a termination and possession order.[9] The ACAT is then given the power to make a termination and possession order, a payment order, or in certain circumstances not presently relevant, refuse to make either of the above orders.
[8] Residential Tenancies Act1997, section 49(1)
[9] Residential Tenancies Act1997, section 49(2)
The above circumstances align closely with the current matter. But two obstacles arise, both in connection with the notice. In the first place, the notice to vacate states that it is given under standard term 93(d), that is, it is given under the term that provides for termination for breach other than a failure to pay rent. Second, although the notice refers clearly to a failure to pay rent and sets out an amount of rent as not having been paid, it does not set out the details of the notices to remedy required under standard term 92(f). It seems to me that either obstacle is fatal to the consideration of the application under section 49 of the RTA. I doubt that an application that informs the tenants that the applicable standard term is 93(d) can then be converted into a notice under quite a different term; and even if it could, the particulars are inadequate to enable the tenants to understand that the lessor is purporting to terminate the tenancy based on term 92(f).
I am compelled to conclude that the application cannot succeed under section 49 of the RTA.
Conclusion
This is an unfortunate matter. The tenants are living in premises that they cannot afford. It seemed to me that they accepted at the hearing that the tenancy had to end, and they referred to attempts to find public housing. The facts of the matter clearly suggest that the lessor has a strong case for bringing the tenancy to an end, and every day when that fails to occur adds to the debt that the tenants owe to him. But termination and possession orders can only be made where the ground is properly prepared, and the requirements of the notice process carefully followed. That did not occur here. I have no option but to dismiss the application.
………………………………..
Senior Member M Hyman
| Date(s) of hearing: | 14 November 2022 |
| Applicant: | Mr A Chakrabarty, Adero Law |
| Respondent: | In person |
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