ROWENA and JASON THOMSON & KARL and RAFA MARJAN (Residential Tenancies)
[2010] ACAT 72
•12 October 2010
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
ROWENA AND JASON THOMSON & KARL AND RAFA MARJAN (Residential Tenancies) [2010] ACAT 72
RT 421 OF 2010
Catchwords: RESIDENTIAL TENANCIES-Compensation-damages for unlawful termination of lease- alleged breach of a residential tenancy agreement-mitigation of damages-lease terminated for stated reasons-family requires premises for own use-premises re-let for substantially higher rent.
List of Legislation. Residential Tenancies Act 1997 ss 38. 83 94 95 & 96.
Schedule 1 Standard residential tenancy terms sub-clauses 96(1)(a) & 96(1) (b)
List of Cases referred to: Kiternas v Watts{2006] ACTRTT4
Peters v Commissioner for Housing in the ACT[2006] ACTRTT 6
Osuchoweski & Scouler v Radojevic [2008] ACTRTT 13
Tribunal: Mr P.R Thompson, Member
Date of hearing: 15 June 2010
Date of Reasons for Decision: 12 October 2010
AUSTRALIAN CAPITAL TERRITORY)
CIVIL & ADMINISTRATIVE TRIBUNAL) No. RT 421 of 2010
BETWEEN
ROWENA & JASON THOMSON
Applicants/Tenants
AND
KARL & RAFA MARJAN
Respondents/Lessors
TRIBUNAL Mr P.R.Thompson. Member
DATE: 15 June 2010
ORDER
Upon hearing Rowena & Jason Thomson the Applicants, and Karl Marjan, the First Respondent, and upon there being no appearance of the Second Respondent, the Tribunal orders as follows:
1.Judgment for the Applicants in the sum of $2,500.00 being damages for unlawful termination of lease. Respondents allowed 60 days to pay judgment debt
2.Payment to be sent by Registered post to PO Box 5493, Kingston ACT 2604.
………………………….
P.R Thompson
Member
REASONS FOR DECISION
On 22 May 2007, the Applicant/Tenants (hereinafter called the Applicants) and the Respondent/Lessors (hereinafter called the Respondents) entered into a Residential Tenancy Agreement in relation to premises at 21/27 Cunningham Street, Kingston ACT 2604.
A copy of that Residential Tenancy Agreement was not filed in these proceedings so I am unaware of the exact terms of that agreement, however, I am aware that a rent review took place in March 2009 and that the rent for the property was increased by $20.00 per week to $500.00 per week, effective from 15 May 2009 and payable at an amount of $2172.65 per calendar month.
On 12 March 2010, a Notice to Vacate the premises by 9 April 2010 was served on the Applicants by the lessors managing agents, LJ Hooker Manuka citing that the lessor(s) was relying on clause 96(1)(a) of the Residential Tenancies Act 1997.(Exhibit A refer)The actual grounds for giving such notice were stated to be:
a) The Tenancy Agreement is subject the Residential Tenancies Act 1997 and its prescribed terms.
b) The prescribed terms , at sub-clause 96(1)(a), states the lessor may serve you with a Notice to where a lessor or a lessor’s immediate relative intends to reside in the premises.(presumably the word ‘Vacate’ has been omitted in error)
c) You and your family as described in the Tenancy Agreement, are required to vacate the said premises on or before 09/04/10, being given the required minimum 4 weeks notice.
On 16 March 2010, according to the documentation on file, the Applicants entered into a Residential Tenancies Agreement in respect of premises described on the lease agreement as being OAKSQUARE 19/31 Howitt Street, Kingston. The weekly rent payable in respect of these premises was stated to be $810.00 per week, due and payable at the rate of $3,519.65 per weekly/fortnightly/monthly/calendar monthly basis payable in advance commencing on the 16th of March 2010. Presumably, the payments are meant to be calendar monthly, but none of the options are crossed out on the copy of the lease agreement available to me.
On 22 March 2010, the Applicants wrote to Ms Samantha Fooks, the Property Manager of LJ Hooker Manuka advising ,inter alia, that as per the advice provided by her company (page 39 of ‘The Renting book’), they intended to vacate the property at 5pm on 29 March 2010. That advice was to the effect that where a Notice to Vacate has been issued, the tenants are able to vacate in the last two weeks of the notice period, provided they gave the lessor 4 days notice of their intention to vacate.
On 29 April 2010, a new listing for the property at 21/27 Cunningham Street, Kingston-The Oak Square appeared on allhomes.com.au with the listing agent being Peter Blackshaw Real Estate Manuka. The rent was stated to be $650.00 per week (Exhibit C refers)
On 4 May 2010 the Applicants wrote to the Respondents in relation to the Notice to Vacate that they received from LJ Hooker Manuka dated 12 March 2010, expressing their concerns regarding the genuineness of the reasons stated in that notice, and requesting the following information:
·Who was the person(s) that was going to move into 21/27 Cunningham Street Kingston?
·When did you make the decision that this person(s) was going to move into 21/27 Cunningham Street, Kingston?
·Why did this person(s) not move into 21/27 Cunningham Street Kingston?
·When did you make the decision that this person(s) would not move into 21/27 Cunningham Street Kingston?
The final paragraph of that letter contained a request for a response to the above questions within 7 days and a notification that failure to provide the requested information would result in the Applicants commencing legal proceedings against their former lessors for compensation for; “the loss incurred from the serving of an unlawful termination of our tenancy.” (Exhibit D refers) According to documentation lodged by the Applicants, their former landlords did not respond to their request.
On 18 May 2010 the Applicants lodged an application in the ACT Civil and Administrative Tribunal (the Tribunal) seeking compensation for the loss resulting from what was claimed to be the unlawful termination of the Applicants’ lease. The losses claimed were stated to include the following:
a)The cost of the move-$2,502.89.
b)The difference between the old ($500) and new ($810) weekly rent amount for a period of 26 weeks (the time frame for a lawful notice to vacate without cause)-$8,060.00.
c)The cost of the ACT civil and administrative tribunal dispute resolution application - $115.
The Applicants further stated that they were also seeking; “compensation for the distress and significant inconvenience suffered as a consequence of the unlawful termination. Such loss will be particularised upon the the Tribunal finding that the tenancy was unlawfully terminated.”
The application also contained references to three decisions of the ACT Residential Tenancies Tribunal. The relevant findings in those matters were stated to be as follows:
·Kiternas v Watts{2006] ACTRTT4.The Tribunal holding in that case that compensation can be awarded under the Residential Tenancies Act 1997 for non-economic loss for distress and inconvience arising from a lessor’s breach of the tenancy agreement.
·Peters v Commissioner for Housing in the ACT[2006] ACTRTT 6 (see above)
·Osuchoweski & Scouler v Radojevic [2008] ACTRTT 13 where it was claimed that the Tribunal awarded general damages in respect of wrongful eviction.
The application itself detailed the observations made by the Applicants, of the comings and goings at their former residence, and the reasons for their belief that their former landlords had unlawfully terminated their tenancy.
The application also contained detailed statements setting out the reasons why they decided to rent the three bedroom apartment in the Oaksquare development at a considerable increased rent. There was also some background information as to their stressful family situation, including the ill heath of Jason Thomson’s father and the effects that this was claimed to have had on both Jason and Rowena Thomson, when coupled with having to move at short notice. There were two references to material that the Applicants considered as being confidential and therefore not included in the original documentation filed in the Tribunal at the time of the initial application. The Applicants did however state that the material would be presented at the hearing.
On 8 June 2010, the Respondents filed a formal response to the application filed by the Applicants. The response was dated 8 June 2010 and signed by both Respondents.
In that response, the Respondents stated that it was their intention to end the Residential Tenancy Agreement between the Applicants and themselves. So with this in mind, they sent a letter dated 8 February 2010, seeking clarification from their managing agents, as to when the lease was to end, and stating that they wanted the property for personal use.
According to the Respondents, they were subsequently advised by Ms Samantha Fooks from LJ Hooker Manuka, that the residential tenancy agreement with the Applicants; “had ceased operation on 21 May 2008 and the lease was therefore subject to a monthly implied periodic tenancy.”
The response also contained the following statement:
Around the same time, the Respondents’ daughter, who was pregnant, and her partner were without a suitable place to live. They lived in rented accommodation in Waramanga with very limited furnishings and only had a short term tenancy. (Para 4 of Response refers).
The Respondents then went on the detail that it was their desire to end the tenancy in accordance with Sub-clause 96(1) (b) of the Standard Residential Tenancy Terms contained in the Residential Tenancy Agreement on the basis that their daughter intended to live in the premises.
Subsequently, according to the response, two notices to vacate were required to be issued by LJ Hooker, as the first one, claimed to have been dated 15 February 2010, was not received by the Applicants. The second Notice to Vacate, dated 12 March 2010 as stated above, required the Applicants to vacate the premises by 9 April 2010. The Respondents go on to state that the Applicants, by prior agreement with the managing agents vacated the premises on 29 March 2010
The penultimate paragraph of the response was as follows:
The Respondents’ daughter and her partner, unknown to the Respondents, exchanged and settled on another property in early April 2010. Accordingly, the Respondents’ daughter and her partner never took possession of the premises. At the time the notices to vacate were issued, the Respondents had a genuine belief that the premises were needed for the personal use of the daughter, her partner, and soon to be born child. At no time did the Respondents know of the Applicants’ difficult circumstances as outlined by them, otherwise an extension would have been gladly granted as before.
The Respondents concluded with a statement that they had, since that time, undertaken measures to re-tenant the premises.
The relevant legislative provisions under which a lessor can terminate a periodic tenancy or residential tenancy agreement without cause and the required notice periods to be given in each specific case, are to be found in Schedule 1 Standard residential tenancy terms of the Residential Tenancies Act 1997 (the Act) and are set out below:
Termination of tenancy without cause
94The lessor may serve a notice to vacate during the term of a tenancy requiring the tenant to vacate the premises at the end of the notice provided that—
(a)the notice is for 26 weeks; and
(b)the notice does not require the tenant to vacate the premises during a fixed term.
95(1) If a tenant is required to vacate the premises in accordance with clause 94, the tenant may vacate the premises at any time during the 2 weeks before the date specified in the notice to vacate provided the tenant gives the lessor 4 days notice of intention to vacate.
(2)In this case, the tenancy terminates on the date that the tenant vacates the premises.
Termination of periodic tenancy
96(1) If there is a periodic tenancy, the lessor may serve on the tenant a notice to vacate for the following periods on the following grounds:
(a)4 weeks notice if the lessor genuinely intends to live in the premises;
(b)4 weeks notice if the lessor genuinely believes the lessor’s immediate relative intends to live in the premises;
(c)4 weeks notice if the lessor genuinely believes an interested person intends to live in the premises;
(d)8 weeks notice if the lessor genuinely intends to sell the premises;
(e)12 weeks notice if the lessor genuinely intends to reconstruct, renovate or make major repairs to the premises and the reconstruction, renovation or repairs cannot reasonably be carried out with the tenant living in the premises.
(2)In this clause:
immediate relative means a son, daughter, son-in-law, daughter-in-law, mother, father, mother-in-law, father-in-law, brother, sister, brother-in-law or sister-in-law.
interested person, for a lessor, means a person who is not an immediate relative of the lessor but who has a close family or personal relationship with the lessor and who has a reasonable expectation arising from that relationship that the lessor would provide accommodation for that person.
97(1) If a tenant is required to vacate the premises in accordance with clause 96, the tenant may vacate the premises at any time during the 2 weeks before the date specified in the notice to vacate provided the tenant gives the lessor 4 days notice of intention to vacate.
(2)In this case, the tenancy terminates on the date that the tenant vacates the premises.
Section 83 of the Act sets out, but does not limit, the orders that the Tribunal may make in disputes such as this one. They include the following:
(a)an order restraining any action in breach of a residential tenancy agreement or occupancy agreement;
(b)an order requiring performance of a residential tenancy agreement or occupancy agreement;
(d)an order requiring the payment of compensation for loss of rent or any other loss caused by the breach of a residential tenancy agreement or occupancy agreement;
(f)an order restoring a residential tenancy agreement or occupancy agreement and granting the former tenant or occupant possession of premises—
(i)from which the person was evicted in contravention of this Act; or
(ii)that the person vacated in accordance with a termination notice that was not in the form (if any) approved under section 133 (Approved forms—Minister) for the notice.
On 3 June 2010, a request was faxed to the General President of ACAT, by Mr. Dennis Martin of the law firm Snedden Hall & Gallop on behalf of the Respondents, requesting that the Tribunal use its powers under Section 33(1) of the ACT Civil and Administrative Tribunal Act 2008 (ACT) to order that the parties take part in a preliminary conference prior to the hearing listed for 2pm on 15 June 2010
A note on file from the General President, the contents of which I presume were conveyed to Mr. Martin, stated that she would be happy to have the matter listed for a conference, but at that late stage it really wasn’t feasible to list a conference any earlier than 15 June 2010, so she suggested that the parties should proceed on the basis that the issues contained in Mr. Martin’s correspondence could be raised at the hearing and that the hearing could proceed on an informal basis, if the Applicants were happy to do so.
On 15 June 2010 the matter came on for hearing before the Tribunal. Both Applicants appeared in person with the Respondent, Mr. Karl Marjan representing himself and his wife, Rafa Marjan. Mrs. Marjan was not in attendance. After a preliminary discussion in relation to the differences between a hearing and a preliminary conference, Mr. Marjan gave his agreement to the matter proceeding as originally scheduled, that is, as a formal hearing.
Mr. Jason Thomson gave the evidence for the Applicants, which was basically much the same information as that already set out above. Mr. Thomson did however also inform me that they had “vacated the property in the context of a tight rental market at the time, for a suitable apartment, as we saw it in the area which we choose to live in which also coincided with the Easter holidays.”
Mr. Thomson confirmed that they rented a bigger apartment that was available and empty at the time for $810.00 per week, as they considered it “suitable.” He went on to state that that “basically the combination of the emotional and financial stress and the subsequent death of my father on 6 April, moving house, my wife Rowena became quite unwell with the stress and was told to rest by a doctor between 14 and 26 April, she was given sick leave.”
Mr. Thomson further stated that they were surprised to see the property advertised on Allhomes for $150.00 a week more, so they attempted to informally resolve the matter by contacting the Respondents directly. He confirmed the earlier advice that they received no reply, so they proceeded with the action now before the Tribunal. The ad had appeared on or about 28 April, 2010.
In response to my question as to what the Applicants were actually claiming in the way of damages, Mr. Thompson indicated they were claiming for the costs of their move, as laid out in their initial application and supported by documentation which was then tendered at the hearing(Exhibit E refers). That documentation was as follows:
1.Grace tax invoice in the sum of $2,502.89
2.Letter dated 20 March 2009 from LJ Hooker showing rent payable of $500.00 per week for the subject residence.
3.Copy of lease for premises rented on vacating subject premises for a rent of $810.00 per week.
4.Photocopy of money order forwarded to ACAT for $115.00 filing fee.
For completeness and because Mr. Marjan queried some of the items, a break-up of the Grace charges in respect of the invoice dated 26 March 2010 has been included below .Those charges were as follows:
·Removal fee $1,356.68
·Packing Charge $52.40
·Insurance Standard cover-Replacement value $200.00
·Equipment hire (crane for couch removal) $325.00
·Carpet Cleaning Service $275.00
·Credit card Usage Fee $66.27
Mr. Thomson also stated that it was his understanding that, if they had been given a lawful notice to vacate, they should have been given 26 weeks notice, hence they were asking for the difference between the rent for the two premises for that period. My calculations, which accord with those in the original application, put the amount claimed for this item at $8,060.00.
There was no further evidence introduced or tendered in support of the claim for general damages.
Mr. Karl Marjan’s evidence was, in the main, in accordance with the details contained in the Response filed in this matter. However, he had not brought any witnesses to support his case, as he didn’t know that they would be required.
Basically, his evidence was that he had a big family to accommodate and he wanted the unit for his own use, but the original intention was to have it untenanted by around June of this year. However, the managing agents, according to the Respondent, informed him he could have it in a month’s time. Specifically, Mr. Marjan stated that it was not his intention to let the property again, “because my stepdaughter wanted to move in because she‘s the one who’s pregnant and I had some other family –I’ve got a big family to accommodate their needs.”
Later, because he himself was going through financial difficulties, he put the matter back on the market. He had since had an offer to re-let the property on a longer lease, but because of his circumstances, he couldn’t do it. He also informed me that the decision of his daughter and her husband to buy their own house and not take the unit, was out of his control.
Mr. Marjan also claimed to be totally unaware that he was required to give his tenants 26 weeks notice, and that he was acting solely on the advice of his agents, LJ Hooker Manuka., who had informed him that “there is no lease.” He had then changed agents, as he was unhappy with the advice being given, and the fact that there was no formal lease.
In support of his case, Mr. Marjan sought to tender his letter to Ms Samantha Fooks dated 8 February, 2010. (Exhibit 1 refers). Clearly, in that letter he states that on expiry of the existing term of the lease, the Respondents required the property for their own use. As a result of that advice, Ms Fooks quite properly issued a Notice to Vacate, giving 4 weeks notice as required under sub-clause 96(1) (a) of the prescribed terms of The Act. (Exhibit 2 refers).
According to the Applicants, they never received that notice to vacate, but in any event a further notice to vacate was issued on 12 March 2010.by Ms. Fooks, presumably acting on the same advice, that is that the Respondents wanted the premises for themselves or for an immediate family member.
On the evidence before me, and in spite of claims made by Mr. Marjan, I found it difficult to attribute any blame to LJ Hookers Manuka or their employee, Ms. Fooks. Whilst Mr. Marjan himself didn’t believe that his actions were in breach of the residential tenancy agreement, he accepted my advice that I believed, on the evidence, that he was in breach, although, the word used at the time was “unlawful.”
Mr.Marjan did however, refute the allegation of the Applicants that he did not respond to their letter of 4 May 2010, which was addressed to Karl and Rafa Marjan. In support of his assertion, he sought to tender a letter addressed to Rowena & Jason Thomson dated 5 May 2010. (Exhibit 3 refers). After reading that letter, I was satisfied that the Respondents attempted to answer the questions set out in the correspondence from the Applicants.
Mr. Marjan made the comment that “It looks like they don’t receive their mail.” The Applicants, for their part confirmed that some of their mail did go missing around that time, causing them to obtain a post office box.
Whilst I indicated that I had no reason to disbelieve what Mr. Marjan was telling me, in the absence of any material or evidence backing up those claims, I believed that the lease was breached in the manner it was terminated, and that the Applicants were entitled to be compensated for their actual losses as set out in the Grace account.
I was not of a mind to award compensation in relation to the Applicants’ claim to be paid for the rental difference for the 26 week period that should have been given, or the claim for me to award general damages for the resultant claimed ill health of Mrs. Rowena Thomson.
Whilst at common law, there is a requirement to mitigate damages, the act itself also provides a legislative requirement to mitigate any loss for which compensation is claimed as a result of any breach by lessors or their tenants, of their residential tenancy agreements. The relevant provision is contained in section 38 of the Act, and is as follows
38General duty to mitigate
A person who, apart from this section, would be entitled to compensation under this Act is not entitled to the compensation, or part of it, if the loss, or part of the loss, to be compensated could have been reasonably avoided.
In relation to their claim to be compensated for the increased rent costs, Mrs Rowena Thompson stated that the premises rented by them “wouldn’t necessarily have been the apartment that we would have chosen, if we hadn’t had to make a decision so quickly in the circumstances we were in.” This statement was backed by her husband who stated that they had to organise a move very quickly.
In the application itself, the Applicants set out their reasons for acting as quickly as they did. That is, that it was Easter, and that being a “popular time for holidays (i.e.: reduced access to viewing properties etc), we realised we needed to move very quickly. There was further urgency as we were going to be away ourselves in Perth, visiting my husband’s very ill father (treatment for metastasised renal cell carcinoma ceased as at 9 March 2010).”
The next paragraph of the application stated “With the exceptionally tight rental market in the inner south, we faced the unpleasant reality that we would need to pay a substantial; increase in rent to secure a property quickly. We were also very distressed at having to leave our home as we gain great enjoyment from our lifestyle-much of which is linked to how/where we live in the Oaksquare development. Therefore, with a degree of desperation, we took the decision to rent a three bedroom apartment that was available at the time, in the same development, and pay the substantially increased rent.”
At the hearing itself, there was no evidence introduced or tendered to support the statements in relation to the rental market at that time, or for the need to act as quickly as the Applicants did.
The second of the two notices to vacate, and the one actually received by the Applicants, was dated 12 March 2010. The Applicants were given until 9 April 2010 to vacate the premises. They actually signed a new lease on 16 March 2010 and vacated officially on 29 March 2009. It could hardly be said that the Applicants went out of their way, or had exhausted all possible avenues available to them, to find premises of comparable rent and standard, to those that they were about to vacate.
On the evidence, both in written documentation and then subsequently given at the hearing, on receiving the Notice to Vacate, the Applicants simply found premises in the same development that they liked and presumably premises they could afford and signed a new lease. Those premises, judging by the rent being asked, were superior to those being vacated. Or at least they are substantially bigger.
There was simply no evidence before me that the Applicants had at any stage tried to avoid paying an increased rent, or had tried to any significant extent, to mitigate their losses, if paying an increased rent for improved living accommodation could ever be considered as being such a loss. In any event, I was not prepared to order the Respondents to subsidise that increased living standard.
Finally, the Applicants were also seeking compensation for the distress and significant incontinence suffered as a consequence of what, in the application, was called the unlawful termination of their lease agreement. It was stated that such loss would be particularised upon the Tribunal finding in the Applicants’ favour. This claim however was not fully argued at the hearing, and no evidence, either of a medical nature, or otherwise was produced or tendered to support it.
I had no reason to doubt that Rowena Thomson had become ill at around that time and been put off work by her doctor for an 8 day period in April 2010. However the doctor’s certificate was never tendered or produced as indicated that it would be, and I remained unaware and uninformed of the exact nature or cause of her illness.
Without any medical evidence of any nature, it was not open to me to try and attribute, and therefore apportion a cause, or blame her illness solely or partially on the actions of the Respondents, especially in view of the illness and death of Mr Thomson’s father on 6 April 2010.
I was nevertheless satisfied for the reasons set out above, that the residential tenancy agreement between the parties to this application was not terminated in accordance with the provisions stated therein, and that therefore, such termination was in breach of that agreement.
The Applicants were therefore on the evidence, entitled to be compensated for their actual losses as a result of that termination. I entered judgment accordingly in their favour in the sum of $2,500.00, being compensation or damages for that breach. I made no order for costs, as such orders are not usually made in this Jurisdiction in my experience.
I allowed the Respondents 60 days in which to pay the amount awarded to the Applicants.
The Applicants objected to this period of time, as being unreasonable on the basis that the Respondents had the financial means to satisfy the amount awarded. In support of this contention they sought to tender a document printed off the internet showing Mr. Karl Marjan as the co-founder of Ali Baba K’Babs & Wraps. (Exhibit F refers).
In view of Mr. Marjan’s claimed financial circumstances, and his commitment to pay the debt within the 60 day the time frame, I was not of a mind to change the time for payment previously granted by me to the Respondents
………………………………….
Mr P.R. Thompson.
Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A
FILE NUMBER: | RT 421 of 2010 |
PARTIES, APPLICANTS: | Rowena & Jason Thomson |
PARTIES, RESPONDENT: | Karl & Rafa Marjan |
COUNCEL APPEARING, APPLICANT | N/A |
COUNCEL APPEARING, RESPONDENT | N/A |
SOLICITORS FOR APPLICANT | |
SOLICITORS FOR RESPONDENT | N/A |
TRIBUNAL MEMBERS: | Mr PR Thompson, Member |
DATES OF HEARING: | 15 June 2010 |
PLACE OF HEARING: | CANBERRA |
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
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