Rice & Dawson v Szlegel - [2009] SADC 27

District Court of South Australia
(District Court Administrative and Disciplinary Division: Appeal Under Residential Tenancies Act 1995)
RICE & DAWSON v SZLEGEL
[2009] SADC 27
Judgment of His Honour Judge Beazley (ex tempore)
19 March 2009
LANDLORD AND TENANT - TERMINATION OF THE TENANCY
Residential Tenancies Act - appeal against orders of Tribunal - Tribunal orders reinstatement of tenancy on condition that back rent is paid. In the event of non-payment the landlord permitted to obtain possession by administrative procedure - tenants' application to vary orders for rental payments refused by Tribunal on basis that tenants did not satisfy "criteria" determined by Tribunal - in law the only criteria is whether there are "proper grounds for doing so" pursuant to s32(1)(f) of the Act. Held - proper grounds to vary the orders for rental payments - orders of Tribunal quashed - in lieu thereof orders made for conditional reinstatement of tenancy.
Residential Tenancies Act 1995 ss32, 37, 41, 110 and 111; Wright v Weston Raine & Horner [2004] SADC 16; McNickle v White & White [2006] SADC 18, referred to.

RICE & DAWSON v SZLEGEL
[2009] SADC 27
Introduction

Naomi Rice and Daniel Dawson (the tenants) appeal, pursuant to s41 of the Residential Tenancies Act 1995 (SA) against an order made by the Residential Tenancies Tribunal on 6 March 2009. As will appear hereafter from these reasons the tenants also in effect seek leave to appeal against an order of the Tribunal made on 16 February 2009. The tenancy arrangements have a long and somewhat unsatisfactory history. As the parties are stressed about the outcome of the appeal it is important that I deliver a judgment forthwith, these being my ex tempore reasons.
It should be said immediately that at all times the landlord, Maurizio Szlegel, and his agent, Sarah Minear, have acted both reasonably and equitably. It will also be apparent that after a major default in about October 2008, the tenants have consistently done their best to ensure compliance with orders of the Tribunal, and to reduce the arrears of rent accrued in 2008.
At all appropriate times they have sought orders for variation in the Tribunal. It was the decision of a member of the Tribunal on 6 March 2009 to decline an application for variation, which compelled the tenants to appeal to this Court. Whether it was appropriate for the Tribunal to direct the parties to this Court is an issue of general importance. I turn now to the orders of the Tribunal which are the subject of this appeal.
The orders
The formal orders of which the tenants complain are as follows:
“- 16 February 2009
(a)Pursuant to s32(1)(f) of the Act, I set aside the order of the Tribunal made on 6 January 2009 and substitute the following orders, which are made under ss80 and 111 of the Act:
The tenancy is reinstated on condition that the tenant:
Pays $350.00 by 5pm on Wednesday, 18 February 2009. If this payment is not made the tenant must move out of the premises by 1pm on Thursday, 19 February 2009.
Pays $350.00 by 5pm on Wednesday, 25 February 2009. If this payment is not made the tenant must move out of the premises by 1pm on Thursday, 26 February 2009.
Payments $400.00 by 5pm on Wednesday, 4 March 2009. If this payment is not made the tenant must move out of the premises by 1pm on Thursday, 5 March 2009.
Pays $400.00 by 5pm on Wednesday, 11 March 2009. If this payment is not the tenant must move out of the premises by 1pm on Thursday, 12 March 2009.
Pays $400.00 by 5pm on Wednesday, 18 March 2009. If this payment is not made the tenant must move out of the premises by 1pm on Thursday, 19 March 2009.
If all these payments are made rent will be paid to 29 March 2009 with $50.00 in hand.
If the tenant does not make payments in 1(a), (b), (c), (d) or (e) 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 would be instructed to evict anyone remaining at the premises without delay.”
“- 6 March 2009
(b)I reiterate that the mere dissatisfaction with the earlier decision of the Tribunal order does not constitute a proper ground for varying or setting aside the decision. Any appeal to the prior order rests with the jurisdiction of the District Court and the procedure for a re-hearing to vary or set aside the order is not an appeal procedure.
Having heard the available evidence from all parties I am not satisfied that the tenant, as applicant, has satisfied the burden of establishing that there are proper grounds pursuant to s32(1)(f) to vary or set aside the order of the Tribunal of 17 February 2009 and therefore I decline to do so.
ORDER
Application dismissed.”
Background
It is common ground that the tenants entered into a Residential Tenancy Agreement in respect of the premises at 10 Innes Court, Greenwith with Maurizio Szlegel (the landlord) for a 12 month period commencing on 18 August 2008.
A security bond in the sum of $1,800.00 comprising $675.00 guaranteed by the Housing Trust and the balance of $1,125.00 paid by the tenants was lodged with the Commissioner of Consumer & Business Affairs. The agreed rental of $300.00 per week was to be paid fortnightly in advance. Throughout the history of the arrangement the tenants had dealt with the landlord’s agent Elders Real Estate – Modbury.
By the month of October 2008 the tenants had fallen into arrears in that the rent was no longer being paid in advance. By application dated 6 November 2008 the landlord sought vacant possession and payment of the bond to it. On 17 November 2008 the Tribunal made an order reinstating the tenancy upon condition that various payments between 21 November 2008 and 2 January 2009 were made in accordance with the times therein specified. The orders were to the effect that if those payments were not made then the landlord could lodge a statutory declaration to that effect and an up to date rent record such that if a Deputy Registrar was satisfied that the payments were not made then a bailiff would be instructed to evict anyone remaining at the premises without delay.
By application dated 4 December 2008 the landlord sought a variation to the orders made on 17 November 2008 to accommodate changes to the paydays of the tenants. The Tribunal made those variations, noted that rent was then paid to 16 November 2008 rather than permitting the landlord to apply by means of a statutory declaration to the Deputy Registrar ordered that the landlord may apply for an urgent hearing to have the bailiff evict anyone remaining at the premises in lieu thereof. That order was made on 9 December 2008 without the attendance of either party.
On 19 December 2008 the Tribunal made a further order apparently again without the attendance of either party, which had the effect of varying the final amount payable on 6 January 2009, and eventually ensuring that the tenants would pay the correct two weeks in advance.
By application dated 2 January 2009 the tenants on this occasion sought to vary the previous orders of the Tribunal to change the rate at which arrears were to be paid. The Tribunal did hear evidence from of the tenants and the landlord’s agent Sarah Minear. The tenants had sought to reduce the payments previously ordered in consequence of the tenants adversely altered financial circumstances. The Tribunal made orders for the payments of various sums on various dates the net effect of which would have been that had the tenants complied with the same then by 4 March 2009 they would have paid rent up to 15 March 2009. The Tribunal made an order that in the event that the first of those payments was not made by the tenants then the landlord could simply lodge a statutory declaration to that effect with an up to date rent record and a Deputy Registrar could instruct the bailiff to evict anyone remaining at the premises. As to the balance of payments the landlord was given leave to apply for an urgent hearing to have the bailiff evict anyone remaining at the premises in the event that the respective payments were not made by their due dates.
By application dated 13 February 2009 the landlord sought an order that the tenants be evicted by the bailiff. The Tribunal noted in its decision of 16 February 2009 that there had been further alterations to the tenants’ working conditions which restricted them to make payments in the sum of $350.00 per week rather than $400.00 per week. The Tribunal noted that in fact rent had been paid to 8 February 2009 with $250.00 in hand. Accordingly it made the orders for variation set out in full on page 1 of these reasons.
The Subject Application
By application to the Tribunal dated 4 March 2009 the tenants sought an further order varying the terms of the order made by the Tribunal on 16 February 2009.
The Hearing – 6 March 2009
Ms Rice gave evidence on behalf of Mr Dawson and herself. Sarah Minear gave evidence on behalf of the landlord’s agent Elders Real Estate Modbury. Ms Rice said that the financial circumstances of her family had changed and she was seeking to reduce the arrears, so that they pay an extra $50.00 per week in rent in addition to that provided under the terms of the lease for a period of six weeks to get two weeks in advance rather than the $100.00 per week for three weeks in the 16 February 2009 order. If granted the arrears would be paid in six weeks rather than three weeks. She indicated that she had paid up until 10 March and was therefore one week in advance but that financially they were unable to pay an extra $100.00 per week.
The Decision of the Tribunal 6 March 2009
The Tribunal was constituted differently from the previous Tribunal hearings. The Tribunal member who heard the matter correctly referred to s37 of the Residential Tenancies Act 1995, which permits applications to be made for the variation of previous orders. It was noted that the Tribunal’s power to vary in light of s32 of the Act, could only be exercised where there are “proper grounds” for doing so. The Tribunal member correctly noted that the categories of such grounds are not closed but notwithstanding that undoubtedly correct statement of law went onto say as follows:
.... for an application to vary or set aside a previous order to be entertained at a re-hearing the Tribunal generally requires one or more of the following grounds to be made out:
(a)that the applicant was unable for good reason to be present at the earlier hearing pursuant to which the order was made;
(b)that the applicant’s evidence relating to the matter not reasonably available at the previous hearing; or
(c) that the Tribunal misinformed itself on the evidence presented at the previous hearing.
The Tribunal then concluded that none of those such grounds were satisfied in the applicant’s case. It then held:
The tenant’s application is that she is not content with the decision to increase the weekly rent payable from $350.00 per week to $400.00 per week reflecting the change set out in 1(c) of the orders affective (sic) from 4 March 2009. I reiterate that the mere dissatisfaction with the earlier decision of the Tribunal order does not constitute a proper ground for varying or setting aside the decision. Any appeal to the prior to order rests with the jurisdiction of the District Court and the procedure for a re-hearing to vary or set aside the order is not an appeal procedure.
Accordingly the application by the tenants was dismissed and they have been obliged to appeal to this court.
As this Court previously noted in McNickle v White [2006] SADC 16, the Tribunal seemed to adopt the strict approach in Wentworth v Woollahra Municipal Council (1982) 149 CLR 672.
With great respect to the Tribunal member who heard the application it is self-evident that “proper grounds” for a variation of orders may arise in a wide variety of circumstances.
In particular as is clearly apparent from the various applications for variation which had been made by the parties to this particular tenancy, the Tribunal as differently constituted, had accepted the poor financial circumstances of the tenants as “proper grounds” for the variation of previous orders.
It has been made clear by many judgments of this court, including that in Wright v Weston Raine & Horne [2004] SADC 16 and McNickle’s case, (supra), that the appropriate way for a tenant to seek relief is by means of an application to vary orders under s37 of the Act rather than requiring the tenant to appeal to this court. The alternative is not only onerous for the tenant but also for the long-suffering landlord who is simply relying on the orders made by the Tribunal.
The combined effect of the order of the Tribunal dismissing the tenants’ application on 6 March 2009 coupled with the order made on 16 February 2009 was that the landlord was simply in a position to lodge a statutory declaration to the effect that payments in accordance with the latter order had not been made together with an up to date rent record, and this administrative procedure would permit the Deputy Registrar of the Tribunal to permit the bailiff to evict anyone remaining at the premises without delay.
In the present case it must have been obvious that the tenants were generally doing their best and had reduced the outstanding sums to about one week’s default. It was, with respect, not simply a question of the tenants being dissatisfied with a previous decision of the Tribunal. It was a situation where tenants who had consistently endeavoured to meet the obligations under the orders had found that they were financially unable to comply. They were seeking a minor variation to ensure that payments would shortly conform with the two weeks in advance.
The Appeal
On 11 March 2009 another Judge of this court because of its urgency stayed the right of the landlord to enter into possession pursuant to the orders of 16 February 2009 and 6 March 2009 until a determination of the appeal.
On the appeal Ms Rice appeared on behalf of Mr Dawson and herself. The landlord was again represented by Ms Minear. Ms Rice indicated that she had continued to pay rent at the rate of $350.00 per week which had the consequence that within a period of three weeks the rent would be paid up to the necessary two weeks in advance. Ms Minear quite properly conceded the payments which had been made. She pointed out that the tenancy itself was for a relatively short period of time and that the tenants had fallen into arrears soon after going into the premises. She acknowledged the ongoing payments and the fact that within some three weeks the rent ought to be back on line. She confirmed the obvious, namely that both her client landlord and herself had been put to a great deal of inconvenience in attempting to ensure that the tenants complied with the rental agreement and the orders made by the Tribunal.
Although she pressed her clients instructions to seek possession in accordance with the orders of 16 February 2009, she properly conceded that the tenants would have the rent back on track within 3 weeks and that it would be unfair to evict tenants who had tried to meet their obligations. Such a concession was appropriate and again reflects the reasonable approach of the landlord and Ms Minear to this matter.
Discussion
I have referred to the various orders made by the Tribunal throughout the history of this matter. The nature of the orders has varied somewhat. On occasions the orders had permitted multiple self-executing orders such that the landlord could proceed administratively by filing with the Deputy Registrar a declaration of non-payment or underpayment, together with a rent record. This procedure would allow administratively for the bailiff to obtain possession forthwith.
Although this practice is quite common apparently in the Tribunal its dangers are obvious. A trivial breach, or a breach without the fault of the appellant where monies might go astray or something else unforseen might arise would have devastating consequences for a tenant. This was clearly recognised by some of the previous orders of the Tribunal which envisaged the landlord making application for an urgent hearing to have the bailiff immediately evict anyone remaining at the premises. That latter form of order, which is hardly onerous so far as the landlord is concerned, permits the Tribunal itself to supervise its own processes.
I repeat that insofar as the Tribunal apparently understood its power under s37 of the Act as requiring the applicant seeking a variation or the setting aside of the previous order of the Tribunal to satisfy certain criteria, in fact the only statutory considerations the Tribunal must consider when entertaining an application under s37 is that there are “proper grounds for doing so” as prescribed by s32(1)(f) of the Act.
I again make it clear that in the ordinary course of events, tenants ought make application to the Tribunal pursuant to s37 for a variation of the orders rather than being required to appeal to this court seeking in effect a variation.
In accordance with the orders made by the Tribunal on 16 February 2009 the last of the payments was due yesterday, namely 5pm on Wednesday 18 March 2009. Had the various payments of $400.00 been paid then the rental would have been paid up to 29 March 2009 with $50.00 in hand. In fact the tenants have paid a total of $150.00 less. Consequently the last payment of $350 in fact paid on 17 March 2009, results in rent being paid up to 22 March 2009 with $200.00 in hand. In effect the tenants are within $100.00 of meeting their obligation to have paid two weeks in advance.
Conclusion and orders
I have referred to the reasonable attitude of the landlord and the consistent payments made by the tenants. This was an obvious case for a variation of the order of 16 February 2009.
In my opinion the Tribunal ought to have varied the order of 16 February 2009 to permit the payments of $350 in lieu of the figure of $400 referred to therein. The Tribunal ought not to have restricted the criteria in respect of which a variation may be granted under 3 37 of the Act.
In my opinion it is appropriate to quash the order made on 11 March 2009 and make the orders pursuant to s 41 of the Act which ought to have been made by the Tribunal on that day. I vary the order of 16 February 2009 to substitute the sum of $350 for the sum of $400 appearing in the last three payments in that order reflecting what has in fact been paid by the tenants. In addition I order that the tenancy be reinstated upon condition that the tenants:-
1.Pay the sum of $350.00 by 5pm on Wednesday, 25 March 2009. If this payment is not made the tenants must move out of the premises by 1pm on Thursday, 26 March 2009.
2.Pay the sum of $350.00 by 5pm on Wednesday, 1 April 2009. If this payment is not made the tenants must move out of the premises by 1pm on Thursday, 2 March 2009. If the tenants make both payments in 1 and 2 hereof, such payments should place the arrangements back on foot, namely two weeks in advance.
3.In the event the tenants do not make a payment in (1) or (2) and do not move out of the premises by the time stated the landlord may apply to the Tribunal for an urgent hearing to have the bailiff immediately evict any one remaining at the premises.
Given the history of the matter I make it clear to the tenants that their prospective payments of $300 per week after 1 April 2009 are not covered by these orders and the landlord retains his full rights under the Act to pursue the matter in the Tribunal should there be a further default in respect of those prospective payments of rent.