Salter v Child & Crawford - [2008] SADC 40

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Under Residential Tenancies Act 1995)
SALTER v CHILD & CRAWFORD
[2008] SADC 40
Judgment of Her Honour Judge Trenorden
18 April 2008
LANDLORD AND TENANT - RENT - GENERALLY
Appeal - Dispute re: payment out of security bond - claims for unpaid rent and reimbursement of gas bills - compensation claim - breaches of Act by landlord - interests of justice.
HELD: Remitted to the Tribunal for orders consistent with Court's judgment.
Residential Tenancies Act 1995 ; Residential Tenancies (General) Regulations 1995, referred to.

SALTER v CHILD & CRAWFORD
[2008] SADC 40
THE COURT DELIVERED THE FOLLOWING JUDGMENT:
Introduction

Ms Salter was a tenant in residential premises at 32 York Place, Woodville North (the premises), between 6 November 2004 and 18 April 2007 (the tenancy period).
Ms Salter has appealed pursuant to s 41 of the Residential Tenancies Act 1995 from the order and determination made by the Residential Tenancies Tribunal ("the Tribunal") on 11 September 2007.
The persons in the position of landlord were Ms Child and Mr Crawford (the landlord), according to the residential tenancy agreement. The landlord has also variously been referred to as Child Crawford and Associates, and solely Ms Child. The latter appears to have had most contact on behalf of the landlord, with Ms Salter.
Respondent Not Appearing
The appeal hearing proceeded on 16 January 2008 without any representation by or on behalf of the respondent landlord, who had at all times been represented only by Ms Child. I shall explain the reason for that course having been taken.
The parties attended at this Court for a preliminary hearing on 5 December 2007, at which time the appeal was listed for hearing in the Court on 16 January 2008. However, on the morning of 16 January 2008 and prior to the scheduled commencement time for the hearing, the Court Registry was telephoned by Ms Child for the landlord, who advised that she was unable to attend the hearing because of illness of a family member. Ms Child further stated that she had nothing to add to that which she had put forward at the hearing in the Tribunal. No application or request was made by Ms Child to adjourn the hearing.
Having been informed by Court staff of what had been conveyed in the telephone call to the Court Registry on behalf of the landlord, I advised the appellant in open Court and, there having been no application for an adjournment, I determined to proceed with the hearing of the appeal.
The Determination of the Residential Tenancies Tribunal
The Tribunal found that the tenant's claims for compensation were not made out, but that the landlord had established claims totalling $2031.26, comprising $1432.85 for rent arrears and $598.41 for gas bills.
In consequence, the orders made by the Tribunal on September 2007 were as follows:
1. Pursuant to Section 110(1)(i) of the Act, I order that the security bond of $800.00 held by the Commissioner (Bond No. 3395134-6) be paid to the landlords.
2. Pursuant to Section 110(1)(c) of the Act, I order that the former tenant pay the sum of $1231.25 to the landlords within 14 days of the below date. Failing payment, this order may be registered in the appropriate court and enforced as an order of that court.
The proceedings in the Tribunal commenced when Ms Salter applied for payment out of the security bond lodged with respect to her tenancy of the premises. On 11 May 2007, the landlord through Ms Child formally contested Ms Salter's claim to have the security bond refunded. The hearing was scheduled for 20 July 2007, but on 16 July was re-listed, at the request of the landlord for 26 July. On 17 July 2007 Ms Salter claimed $2,500.00 compensation, on various grounds, including that the landlord had failed to give "correct notice" of termination of the tenancy.
Although the landlord had initially claimed the full bond amount of $800.00 on various grounds, by letter dated 24 July the landlord wrote to the registrar of the Tribunal seeking to amend the claim to a total amount of $3,168.41. Notwithstanding this late claim, the scheduled hearing before the Tribunal proceeded on 26 July 2007, to the point where it became clear that Ms Salter wished to amend her own claim substantially to include a claim for compensation on various bases. On 26 July 2007 the Tribunal hearing was adjourned and Ms Salter then filed an amended claim for compensation in the amount of $5,400.00.
On 26 July 2007 the Tribunal determined that the details of the Residential Tenancy Agreement between the parties were as follows:
Premises:                   32 York Place, Woodville Gardens SA 5012
Landlord:                   Child Crawford and Associates
Tenant:   Jodie Salter
Tenancy commenced:    6 November 2004
Period of tenancy:         6 months, then periodic
Rent:   $200 per week, payable fortnightly
Security Bond:              $800 was guaranteed by the South Australian Housing Trust on behalf of the tenant and lodged with the Commissioner for Consumer Affairs (Bond No. 3395134‑6)
The identification of the landlord as Child Crawford and Associates appears to have been in error, as the Residential Tenancy Agreement document clearly shows the landlord as Henrietta Marie Child and Paul Gordon Crawford. On 14 August 2007, the hearing recommenced before the Tribunal and a determination was published and orders made, as set out above, on 11 September 2007.
The Appeal
The basis of the appeal was that the Tribunal had erred in finding that the respondent (“the landlord”) had established claims totalling $2,031.26 against the appellant comprised of $1,432.85 for rent arrears and $598.41 for gas bills, and that in consequence the orders made by the Tribunal were in error.
At the hearing, the Court had before it the file from the Residential Tenancies Tribunal which appeared to include all documentary material presented to the Tribunal as evidence in support of their respective cases, as well as handwritten notes by the Tribunal member who heard the matter, which notes bear the date 24 August 2007. The notes appear to be a record of that which transpired at the hearing, but I note they were dated some ten days after the date of the hearing in the Tribunal. There is no transcript of the hearing or the oral evidence.
Under s 41 of the Residential Tenancies Act, this Court on appeal may re-hear evidence or take further evidence. The Court has the following powers:
(1) …
(2) On an appeal, the District Court may (according to the nature of the case) -
(a)re-hear evidence taken before the Tribunal, or take further evidence;
(b)confirm, vary or quash the Tribunal’s decision;
(c)make any order that should have been made in the first instance;
(d)make incidental and ancillary orders.
The Court permitted Ms Salter to provide further evidence to the Court, which also took into account the determination appealed from and the material on the Tribunal file in relation to the matter. The evidence given by Ms Salter and her witness Vicente Moran appeared largely to be a repetition of the evidence given by them to the Residential Tenancies Tribunal, so far as I can tell by comparing the evidence I heard with the notes of the evidence recorded by the Tribunal member.
The Law
Where there is a periodic residential tenancy, as was the case here, the Residential Tenancies Act and the Residential Tenancies (General) Regulations 1995 require the landlord, inter alia, to:
·ensure that a proper record is kept of rent received (s 57 (1))
·give a receipt for rent received within 48 hours (s 58 (1))
·keep the rented premises in a reasonable state of repair (s 68 (1))
·complete and provide signed copies of an inspection sheet that provides details of fixtures and fittings in the condition of the premises, in accordance with Regulation 7 of the Residential Tenancies (General) Regulations
·if giving notice of termination:
-give written notice in the form set out in form 3 of the Regulations (s 91 and Regulation 12)
-give 60 days notice (s 81)
On the other hand, the tenant is required by the legislation to:
·keep the premises in a reasonable state of cleanliness (s 69 (1))
·reimburse the landlord for provision of gas, electricity or telephone services to the premises if any of those services are in the landlord's name (s 53 (2)(c) and Regulation 8)
·give back the premises to the landlord in reasonable condition and state of cleanliness at the end of the tenancy (s 69 (3))
The Landlord's Claim
I will deal first with the findings of the Tribunal with respect to the landlord’s claims.
Arrears of Rent
It had been agreed between Ms Salter and Ms Child that rent would be paid fortnightly in cash, after some payments had been made by direct debit from Ms Salter's bank account early in the tenancy.
The Tribunal found that the total amount of rent payable at $200.00 per week for the period 6/11/04 to 18/4/07, being 127 weeks and 5 days, was $25,542.85. This arithmetical calculation is correct.
The Tribunal accepted the rent book as evidence of rent moneys paid. The Tribunal calculated the payments in the landlord's rent book to add up to $23,510.00, which it referred to as a “rental credit”. However, the payments shown in the rent book actually add up to $23,520.00. There was an error on the part of the Tribunal.
The Tribunal found that a total period of 3 weeks was allowed rent free, being 2 weeks at Christmas 2005 and one week at Christmas 2006. Ms Salter claimed that the rent-free periods allowed by the landlord were one week at Christmas 2005 and 2 weeks at Christmas 2006. As the total rent-free period remains the same, nothing turns on this difference. This equates to a paid up rental of $600.00 for the 3 weeks. Thus, following the Tribunal's reasoning, but using the correct sum, the rental credit is $23,520.00 actually paid plus $600.00, which equals $24,120.00.
Ms Salter claimed that there was an agreement with the landlord for a rent-free period of one week; the rent due for that week to be put to the purchase by Ms Salter of curtains for the window in the back room of the premises. Ms Child had given evidence that a 2 week rent-free period had been allowed to enable Ms Salter to purchase a blind for the window in that room but that the blind was not left at the premises at the end of the tenancy. This was contrary to the evidence of Ms Salter that the curtains that had been purchased as agreed were left hanging in the back room at the premises. The Tribunal preferred the evidence of Ms Child rather then that of Ms Salter and disallowed the rent-free period.
It is in order to avoid disputes such as that over the curtains or blind in the back room, that the Regulations suggest that an inspection, with checklist, be carried out with both the landlord and the tenant present, at the beginning and the end of a tenancy. This was not done.
Ms Salter gave evidence before this Court and I formed the opinion that she was telling the truth. Contrary to her own interest, Ms Salter insisted that the rent-free period for the purchase of the curtains was one week, not 2 weeks as recorded by Ms Child. Unfortunately, I was not able to hear from Ms Child. I accept that the Tribunal member was in a better position to assess the evidence of Ms Salter in comparison with that of Ms Child. However, I am inclined to accept that Ms Salter did purchase the curtains and did leave them hanging in the window of the back room in the premises upon her departure. I am fortified in my conclusion by the evidence that Ms Child had looked at the state of the premises at Ms Salter's request on either the 12 or 13 April 2007, when Ms Salter was preparing to move out, and had advised that she was happy with the premises, that the house was in good condition and clean and tidy. My conclusion is further strengthened by the fact of the reference dated 31 March 2007 provided in respect of Ms Salter, by the landlord, to which further reference will be made subsequently. This reference does not appear to have been before the Tribunal.
I would allow the one week rent-free period for the purchase of those curtains. It follows then that the total rental credit (if the rent book is to be accepted as conclusive) is $24,120.00 plus $200.00 (1 week's rent), which equals $24,320.00. When compared then with the total amount of rental due for the period of tenancy of $25,471.43, there is a shortfall in rent monies of ($25,542.85 less $24,320.00) $1,222.85.
The above calculation has assumed the correctness of the entries in the rent book. Ms Child had tendered as evidence to the Tribunal the rent book and what was described by the Tribunal in its reasons as "a printout of a computer program showing a list of rent payments and amounts either received or outstanding for gas bills".
As evidence, the rent book is not without problems. In some cases the entry has been amended, overwritten or scratched out, sometimes in ink different from that used in the signature of the landlord for the relevant entry. Ms Salter's evidence was that she had seen a rent book on 2 or 3 occasions early in the tenancy, but had not seen the rent book produced to the Tribunal.
On the Tribunal file there are 2 printouts on the letterhead of Child Crawford and Associates entitled "Sales [Customer Detail]". One printout appears to have been printed on 24/05/2007 and bears the following additional heading: "1/07/2004 through 31/05/2007" (printout number 1). The other printout appears to have been printed on 21/06/2007 and bears the following additional heading: "1/7/2004 through 30/06/2005" (printout number 2). A perusal of both printouts for the same period namely, 1/07/2004 to 30/06/2005, reveals a difference. Printout number 2 has 19 entries, all of which appear to be entries with respect to rent, excepting that for 24/02/2005 which is described as "Reimbursement of Origin Bill" in the amount of $72.41. Printout number 1 has only 3 entries for the same period, and they all relate to rent. In each case the first 3 items, all being for rent for the first 3 weeks or so of the tenancy in November 2004, are noted in the "status" column as "open". That was explained in evidence to the Tribunal as meaning that the rent had not been paid. Unfortunately I can come to no conclusion with respect to this evidence and the apparent discrepancies between the documents, except to find that they do not present a clear picture of rent paid or owing. The source of the entries in the printouts is nowhere explained. According to the Tribunal's notes of the evidence, it appears that the landlord's bookkeeper kept the records, presumably as instructed by Ms Child for the landlord. The bookkeeper did not give evidence.
It does seem that the rent records were not maintained in an orderly fashion. It also appears that the landlord was in breach of the landlord' s obligation under the Act to give a receipt for rent received, according to the evidence of Ms Salter and the absence of any evidence of receipts or duplicates of receipts in the materials tendered or provided to the Tribunal.
Ms Salter gave evidence that she had paid the rent for the entire period of the tenancy, with the exception of the 4 weeks that were given rent-free, as described above. However, her evidence was that she was never paid up in advance and did not always pay as the rent fell due. Her evidence was also that she had not paid rent for the days between 14 April and 18 April 2007, the date on which she vacated the rental premises. Given that the rent was never paid in advance, and the rent was generally paid fortnightly, it is likely that rent not been paid for the fortnight ended 13 April. Thus $400.00 was likely to have been owed, together with $142.85 for the period 14 April to 18 April, making a total of $542.85 owing for rent.
Ms Salter kept no records of rent paid by her. She received no receipts for rent paid. Ms Salter may have been confused about whether the full amount of rent had been paid. On the landlord's documents (the rent book and the printouts), it appears that there was an amount of $1,222.85 in rent owed by Ms Salter to Ms Child. I have concluded on Ms Salter's evidence that she most likely owed, as a minimum, $542.85 in rent. Given the state of the records, is not possible to be absolutely certain about the correctness of this amount.
The landlord provided to Ms Salter a reference concerning Ms Salter in the form of a letter "To Whom It May Concern" dated 31 March 2007. That letter asserted that Ms Salter, among other things, "had paid rent regularly and on time". It is difficult to accept that the landlord would have stated that as a fact, if it was untrue. It does not appear that this evidence was before the Tribunal.
I have concluded that Ms Salter owes the landlord the amount of $542.85 for unpaid rent.
The Gas Bills
The Tribunal found that the landlord had paid 5 Origin Energy accounts totalling $708.41 for gas used at the premises between the commencement of the tenancy and March 2006. The Origin Energy account was transferred into Ms Salter's name at some time prior to the account received by her on 7 July 2006. The Tribunal further found that Ms Salter had paid only $110.00 towards the gas bills for that period. It therefore concluded that Ms Salter owed the amount of $598.41 to Ms Child for the outstanding gas bills.
Again, the evidence did not provide a clear picture. For example, printout number 1 shows a total amount of $708.41 outstanding for gas. In the initial letter to the Tribunal, the landlord claimed that $608.41 was outstanding for gas bills.
There is no error in the Tribunal's calculation of the total amount of the Origin Energy accounts, as being $708.41. Ms Salter queried whether all of the Origin Energy accounts related to the rental premises. It is clear from the evidence before the Tribunal that with the exception of the account issued on 22 March 2006 in the amount of $123.67, which is likely to have been for the period ending 20/3/2006, all accounts related to the rental premises being 32 York Place Woodville North. The uncertainty about the account issued on 22 March 2006 is because the only documents before the Tribunal were 2 account rendered notices, but no original account. This is the same account that Ms Salter said in evidence she might not have paid, being the last account prior to the Origin Energy account being put in her name.
The rent book shows $100.00 received for a gas account, apparently in August 2005, if its place in the rent book can be considered a guide to the date on which the payment was made. This coincides with an undated hand printed note on the original Origin Energy gas account issued on 22/03/05. However, printout number 2 has an entry for the date 24/02/2005 in the amount of $72.41 described as "reimbursement of Origin Bill". The Tribunal file includes tax invoices provided by Child Crawford and Associates, on their letterhead, directed to Ms Salter, being invoices for reimbursement of Origin Energy gas accounts. There are 5 of them bearing these dates: 2 April 2005, 26 June 2005, 2 September 2005, 15 December 2005 and 28 March 2006. They correspond with the 5 Origin Energy accounts that totalled $708.41. There is no evidence as to whether these accounts were actually given to Ms Salter, who claims not to have seen them.
It does appear that Ms Salter owed money to the landlord for the gas accounts, but the exact amount is unclear. It may be as determined by the Tribunal, the amount of $598.41 or only in respect of the March 2006 account namely $123.67. Again, Ms Salter kept no records of moneys paid towards the gas accounts. I am not satisfied that the landlord's records reflect a complete picture either. However, it does appear from the evidence that Ms Salter owed the landlord $123.67 for the gas accounts.
Some Conclusions about Moneys Owed By the Tenant

It is clear that neither party maintained a proper set of records with respect to either rental payments or gas account payments. It seems that the tenant and Ms Child of the landlord were on good terms, generally, until after the period of the tenancy.
From the evidence that has been presented and my conclusions, Ms Salter owes rent in the amount of $542.85 and money for reimbursement of gas accounts paid, of $123.67. That makes a total of $666.52 owed by Ms Salter to the landlord. There may have been more monies owed, but I find that is not proven having regard to the state of the records.
Breaches of the Act
The landlord was in breach of their obligations under the Residential Tenancies Act. The landlord, as I have said above, failed to give a receipt for rent received and failed to give proper notice of termination in accordance with the Act.
I also take into account that the landlord provided the following reference dated 31 March 2007, concerning Ms Salter, and signed by Henrietta Child:

RE: Jodie Salter
32 York Place
Woodville Nth
To Whom It May Concern:
Jodie Salter has been a tenant at my property at 32, York Place since December 2004. Due to matrimonial property settlement negotiations the house at 32 York Place is to be sold and Jodie's tenancy has therefore been terminated.
During her tenancy, Jodie has kept the house in good condition. She has always been good-natured and positive in regard to any request I have made, and has paid rent regularly and on time.
I hope all goes well for her in the future.
(Signed)
Yours faithfully
Henrietta Child

This letter appears to confirm Ms Salter’s evidence that she and Ms Child were on good terms. It appears that was the case, with Ms Child tolerating Ms Salter’s always being in arrears with the rent payments. Neither party insisted upon their rights in relation to the other. Despite less notice of termination than she was entitled to, Ms Salter endeavoured to move out as requested, and not to insist upon her rights. The difficulty only appears to have arisen after the end of the tenancy and has been exacerbated as a result of the failure during the tenancy to keep records and generally abide by the provisions of the Act.
Insofar as there may have been moneys owed by Ms Salter to the landlord, over and above the amount of $666.52, I have determined that having regard to the inadequacy of the landlord's evidence before the Tribunal as to the payments made by Ms Salter for rent and reimbursement of the payment of the Origin Energy accounts, this has not been proven, on the balance of probabilities. Even if the balance of probabilities favoured the landlord, given the breaches of the Act by the landlord in particular the failure to give rent receipts and the failure to give notice of termination of the tenancy as required by the Act, lead me to conclude that the decision of the Tribunal was not in the interests of justice.
Tenant's Claim for Compensation
Before the Tribunal, Ms Salter pursued a claim for compensation. That claim was not made out, according to the Tribunal. I do not propose to disturb that finding. The Notice of Appeal to this Court did not include a challenge to that finding by the Tribunal. I appreciate that the appellant, Ms Salter, may not have understood that she needed to include in the Notice of Appeal every aspect of the Tribunal decision that she wanted to challenge. However, it would be unfair and contrary to the interests of justice for this Court to deal with a challenge to the finding of the Tribunal on the compensation claim, in the absence of the landlord, when the landlord was not put on notice that this was intended, and I do not propose to do so.
Conclusion
I would uphold the appeal and vary the orders made by the Tribunal. I would propose that it be ordered that the amount of $666.52 of the security bond held by the Commissioner be paid out to the landlord, and that the balance of the security bond be paid out to the tenant.
However, I note from the Tribunal file that the bond was paid by the South Australian Housing Trust on behalf of Ms Salter. It is not clear to me whether an order should be made that the balance of the security bond moneys be paid direct to the South Australia Housing Trust, or to Ms Salter.
Thus, it is appropriate that I remit the matter to the Tribunal for final orders to be made consistent with this judgment. I propose to make the following orders:
1 The orders of the Tribunal are set aside.
2 The matter is remitted to the Tribunal for orders to be made consistent with this judgment.