Schaffer v Usca - [2016] SADC 61

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Under Residential Tenancies Act 1995)
SCHAFFER v USCA
[2016] SADC 61
Judgment of His Honour Judge Millsteed
16 June 2016
LANDLORD AND TENANT - RESIDENTIAL TENANCIES LEGISLATION
Order made by the Residential Tenancies Tribunal that the Applicant pay the Respondent compensation pursuant to s 110(1)(c) of the Residential Tenancies Act 1995 (RTA) - application for an extension of time in which to appeal against the order pursuant to s 41 of the RTA - Tribunal's power to make order dependent on the existence of a residential tenancy agreement between the parties as defined in s 3 of the RTA - whether provision of maintenance of the property and the payment of water bills by the Respondent satisfied the requirement of rent - application for extension of time refused on the grounds of unsatisfactory delay in the filing of Notice of Appeal - finding that the appeal would have been dismissed if application had been granted because the payment of water rates, though not the provision of maintenance, constituted rent.
Residential Tenancies Act 1995 s 110(1)(c), referred to.
Spurway v The Police [2011] SASC 177; Beaton v McDevitt (1987) 13 NSWLR 162, considered.

SCHAFFER v USCA
[2016] SADC 61
Introduction

This is an application for an extension of time in which to appeal against an order made by the Residential Tenancies Tribunal (‘the Tribunal’) that the Applicant, Julius Schaffer, pay the Respondent, Aurel Usca, compensation in the amount of $10,000 pursuant to s 110(1)(c) of the Residential Tenancies Act 1995 (‘RTA’).[1] The grounds of appeal assert that the Applicant and the Respondent were not parties to ‘a residential tenancy agreement’ under which rent was payable and, accordingly, the Tribunal had no jurisdiction power to make the compensation order.
[1] The references to the RTA in the judgment relate to the applicable provisions at the time of the relevant events.
Background
The following summary is derived from the Tribunal’s factual findings in its written reasons for decision published on 16 December 2013. The Applicant does not challenge those factual findings. The Applicant’s jurisdictional argument is based solely on an application of law to the Tribunal’s factual findings.
On or about 15 May 1996 the Respondent commenced occupation of the Applicant’s property at Lot 102, 16 Hayward Drive, Glen Osmond (‘the property’). The Applicant lived at Henley Beach. The Respondent lived in a shed on the property and stored various items of personal property in other sheds. Other structures on the property included a caravan and a shipping container which were not used by the Respondent.
The Respondent occupied the property until 8 September 2013 when police attended, at the Applicant’s request. The police purported to exercise their powers under s 17A of the Summary Offences Act 1953 and directed the Respondent to leave the property on the grounds that he was a trespasser. The Respondent complied with the direction but returned to the property the following day and resumed his occupation of it.
On 18 September 2013, the Respondent lodged a Form 7 application with the Tribunal seeking orders that he lived on the property under a residential tenancy agreement, that the tenancy had not been lawfully terminated and that the Applicant was not entitled to vacant possession.
On 26 September 2013, the City of Burnside Council wrote to the Applicant informing him that an inspection of the property, conducted that same day, had revealed the presence of structures which had been erected without approval under the Development Act 1993. The letter requested that the Applicant remove the unauthorised structures within four weeks. The unauthorised structures included the shed in which the Respondent lived, the sheds in which he stored personal belongings, and the shipping container.
On 27 September 2013 police re-attended the property and directed the Respondent to leave. The Respondent complied but apparently had insufficient time to remove many of his possessions. A short time after the Respondent left the property the Applicant used bulldozers to demolish and remove the unauthorised structures. It is not clear, on the evidence put before the Tribunal, how the Applicant would have received the letter from the Council in time to organise and carry out this work.
Tribunal hearings
On 15 October 2013 the Respondent’s application was heard by Tribunal Member H. Anderson.
Both parties gave evidence as to the circumstances which resulted in the Respondent being on the property at the time of the eviction. The Respondent said that he had occupied the property continuously for 17 years pursuant to a verbal agreement with the Applicant which required him to maintain the property and pay the water rates. The Applicant said that he was unaware that the Respondent had been living on the property continuously. He said that the tenant worked for him growing vegetables on the property and that when they were working late he allowed the Respondent to stay in one of the sheds. He denied that the Respondent maintained the property and paid the water rates.
The Tribunal observed that the relief sought by the Respondent had been rendered nugatory by the demolition of the structures in which the Respondent had lived and stored his possessions. However, the Tribunal allowed the Respondent to amend his Form 7 application to include an application for an order that the Applicant compensate him for the possessions he had lost in the demolition pursuant to s 110(c) of the RTA.
On 24 October 2013 the Tribunal made an interim order adjourning the hearing of the application to 14 November 2013 to enable the Respondent to adduce oral evidence from persons whose statements he had tendered, during the earlier hearing, in support of his application.
On 14 November 2013 the Tribunal received oral evidence from three witnesses called by the Respondent. They supported the Respondent’s contention that he had lived on the property continuously over a period of years. The Respondent gave evidence that the possessions he had lost in the demolition were worth in total $46,150.00. He produced a list detailing the items and their approximate value.
The Tribunal gave the Respondent the opportunity to consider whether he wished to pursue his claim before the Tribunal or institute proceedings in the civil jurisdiction given that the Tribunal had a jurisdictional limit of $10,000 in relation to monetary claims (s 24(1) RTA). The Respondent subsequently informed the Tribunal in writing that he wished to have the matter determined by the Tribunal and limited his claim to a reduced number of items that totalled a value of $10,000.
Tribunal’s decision
On 16 December 2013 the Tribunal made an order that the Applicant pay the Respondent $10,000 compensation within 14 days, subject to enforcement in the Magistrates Court of South Australia.
The Tribunal published written reasons for its decision in which it recognised that the power to award the Respondent compensation pursuant to s 110(1)(c) of the RTA[2] was conditional upon the Respondent having occupied the Applicant’s property under a residential tenancy agreement, as defined in s 3 of the RTA, namely:
an agreement (other than a rooming house agreement) under which a person grants another person, for valuable consideration, a right (which may, but need not, be an exclusive right) to occupy premises for the purpose of residence.
[2] Section 110 relevantly states:
110—Powers of the Tribunal
(1)The Tribunal may, on application by a party to a tenancy dispute—
…
(c)order a person to make a payment (which may include compensation) under this Act, a residential tenancy agreement, a rooming house agreement or a collateral agreement or for breach of this Act, a residential tenancy agreement, a rooming house agreement, or a collateral agreement; or
…
(e)terminate a residential tenancy or declare that a residential tenancy has, or has not, been validly terminated; or
…
The Tribunal expressly accepted the Respondent’s evidence, and that of his witnesses, as to the circumstances in which he occupied the Applicant’s property. The Tribunal found that the agreement between the Respondent and the Applicant constituted a ‘residential tenancy agreement’, as defined in s 3 of the RTA, because the Applicant had granted the Respondent, for valuable consideration (namely the Respondent’s payment of water bills and maintenance of the property), a right to occupy the property for the purpose of residence.
The Tribunal further found that the Applicant had unlawfully terminated the tenancy by failing to give the Respondent notice to vacate the property. The Tribunal concluded that the Respondent was entitled to compensation for the possessions he had lost in the demolition pursuant to s 110(1)(c). The Tribunal accepted the evidence given by the Respondent, and his witnesses, as to the nature and value of those items.
The order of the Tribunal made on 16 December 2013 was posted to each of the parties on 19 December 2013. The Applicant’s copy of the order was addressed to ‘Darryl Jones [the Applicant’s accountant] and Julius Schaffer, Level 1 174 Fullarton Road Dulwich SA 5065 [Darryl Jones’ business address]’. For reasons which have not been articulated, the Applicant’s accountant was erroneously referred to in some of the papers before the Tribunal as a co-landlord. Nothing turns on this point.
Magistrates Court Summons
On 15 January 2014 the Respondent caused an Investigation Summons, with a return date of 12 March 2014, to be issued out of the Port Adelaide Magistrates Court following the Applicant’s failure to comply with the Tribunal’s order.
The Investigation Summons was served on the Applicant on 22 February 2014.
On 12 March 2014 the Applicant attended the Port Adelaide Magistrates Court with Mr F Hoelscher, a solicitor with Anderson’s Solicitors. The proceedings in relation to the Investigation Summons were adjourned.
Application to set aside Tribunal order
On 18 March 2014 the Applicant filed an application with the Tribunal for the order made on 20 December 2013 to be set aside pursuant to s 32(1)(f) of the RTA on grounds substantially similar to those upon which the present appeal is founded.
On 28 April 2014 the application came before Deputy Presiding Member M. Alvino. The Applicant was represented by Mr Hoelscher. The Tribunal found that there were no proper grounds to set aside the orders and refused the application. The order made by the Deputy Presiding Member is not itself the subject of the present appeal.
District Court Proceedings
On 6 May 2014 the Applicant filed, in the District Court, a Notice of Appeal against the compensation order made by the Tribunal on 16 December 2013 contending that the Tribunal erred in finding that there was a residential tenancy agreement between the Applicant and the Respondent and, accordingly, had no jurisdiction to make the order.
By virtue of s 41(3) of the RTA,[3] the Notice of Appeal was required to be filed within one month of the Tribunal’s order, unless the District Court allowed an extension of time. The time for commencing the appeal ran from the time the Applicant received the written statement of reasons (s 41(4) RTA).
[3] Section 41 of the RTA provides:
(1) An appeal lies to the District Court from a decision or order of the Tribunal made in the exercise (or purported exercise) of its powers under this Act.
(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.
(3) The appeal must be commenced within one month of the decision or order appealed against unless the District Court allows an extension of time.
(4) If the reasons of the Tribunal are not given in writing at the time of making a decision or order and the appellant then requests the Tribunal to state its reasons in writing, the time for commencing the appeal runs from the time when the appellant receives the written statement of the reasons.
Pursuant to Rule 282(f) of the District Court (Civil) Rules 2006, the Notice of Appeal included an application for an extension of time upon the following grounds:
1. The appellant was not represented by a lawyer at the hearing of RT13/5480 as he was legally entitled pursuant to section 113(2) of the RTA given that the matter raised complex issues of jurisdiction that the appellant did not comprehend at the time of the hearing; as a result the appellant was unable to property [sic] present his case.
2.   The appellant was unaware that judgment had been made against him by the Residential Tenancies Tribunal until he was served with an investigation summons for the judgment debt on 22 February 2014.
3.   When the appellant attended at the Port Adelaide Magistrates Court for the Investigations Hearing on 12 March 2014 he was provided with a copy of the Residential Tenancies Tribunal decision. This was the first time the appellant had an opportunity to read the Residential Tenancies Tribunal decision.
4.   The appellant then engaged the service of Andersons Solicitors to assist him with this appeal.
5.   An extension of time should be allowed in the interests of justice of the case.
The Appeal
The matter was listed for hearing on 25 September 2014. The Applicant was represented by Mr T Bryant and the Respondent by Mr R Bonig. The Applicant gave evidence in support of his application for an extension of time. Following the completion of his evidence, I heard submissions with respect to the application for extension and in relation to the merits of the appeal.
Application for extension of time
Applicant’s evidence
The Applicant’s evidence was rambling and confusing. However, in essence, he testified that he did not become aware of the Tribunal’s decision dated 16 December 2013 until he was served with the Investigation Summons.[4]
[4] T 7, 9.
The Applicant said that, as a matter of practice, mail sent to his accountant’s business address concerning the property was forwarded by his accountant to the Applicant’s home address.[5] The Applicant suggested in cross-examination that if his accountant had sent the Tribunal’s reasons to him that they may have stolen from his letterbox. He said that in the course of 2014 his letterbox had been interfered with twice. He said that he unsuccessfully tried to fix the letterbox ‘a couple of months ago’ (i.e. prior to September 2014). He then reported the matter to the police and to his landlord, the Housing Trust.[6]
[5] T 9-10.
[6] T 9-10.
The Applicant testified that he spoke to Mr Hoelscher after he was served with the Investigation Summons on 22 February 2014. It is an agreed fact that the Applicant spoke to Mr Hoelescher over the telephone in early March and stated that he was being sued for $10,000.[7]
[7] T 20.
It is a further agreed fact,[8] consistent with the Applicant’s testimony,[9] that when Mr Hoelscher attended the Port Adelaide Magistrates Court with the Applicant on 12 March 2014 he obtained from the Court Registry a copy of the Tribunal’s reasons dated 16 December 2013.
[8] T 20.
[9] T 7-8, 8-9.
In cross-examination the Applicant was questioned as to his reasons for failing to immediately appeal to the District Court after he received the Investigation Summons on 22 February 2014 and as to why there was a further delay from 12 March 2014 (when he claims to have seen a copy of the Tribunal’s reasons for the first time) and 6 May 2014 (when the Notice of Appeal was filed). In effect he explained that he had left the matter in the hands of his solicitor.[10]
Principles
[10] T 12, 17.
The principles governing an application for an extension of time were conveniently summarised by Debelle J in Burke v Garsden:[11]
1. The grant of an extension of time is not automatic. … [T]he Court must have regard to the interests of justice. If the law were otherwise, a party in breach would have an unqualified right to an extension of time. This would defeat the purpose of the Rules, which is to provide a time-table for conduct of litigation: Ratnam v Cumarasamy [1965] 1 WLR 8, 12; see also Hughes v National Trustees Executors and Agency Co of Australasia Ltd [1978] VR 257, 263. One object of fixing time limits under the Rules is to achieve finality of judicial determinations: see Hughes v National Trustees Executors and Agency Co Australasia Limited (supra) at 263. The Rules are framed in the interests of expedition and, generally speaking, should be obeyed: Moody v Moody (supra) at 335.
2. The object is to ensure that the Rules which fix times for doing acts or taking proceedings do not become instruments of injustice. In other words, the discretion to extend time is given for the sole purpose of enabling the Court to do justice between the parties: Hughes v National Trustees Executors and Agency Co of Australasia Ltd (supra) 262; Gallo v Dawson (1990) 93 ALR 479, 480. The consequence is that the discretion will only be exercised in favour of an applicant upon proof that strict compliance with the Rules will work an injustice.
3. In determining whether the Rules will work an injustice, the Court will have regard to the length of the delay, the reasons for the delay, whether there is an arguable case and the extent of any prejudice to the respondent: Palata Investments Ltd v Burt and Sinefield [1985] 1 WLR 942, 946; Esther Investments Pty Ltd v Markalinga Pty Ltd (1989) 2 WAR 196, 198. In other cases, it has been held that, when determining the question of injustice, the Court will have regard to the history of the proceedings, the conduct of the parties, the nature of litigation and the consequences for the parties of the grant or refusal of the application for extension of time: Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86, 92; Jess v Scott (1986) 12 FCR 187, 194-195; Gallo v Dawson (supra) at 480. I do not think there is any material difference between the two lists of factors which have to be considered. The matters in each list overlap to a great extent.
4. When considering the reasons for delay, regard will be had to whether the delay is attributable to the party or to his solicitors. The former will operate more severely against the applicant: Allen v Sir Alfred McAlpine and Sons Ltd [1968] 1 All ER 543, 555-556, 561; Ulowski v Miller [1968] SASR 277, 282-283; Esther Investments Pty Ltd v Markalinga Pty Ltd (supra) at 198.
5. When considering the extent of any prejudice to the respondent, regard will be had to the vested right a respondent has to retain the judgment unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200, 201; Gallo v Dawson (supra) at 480.
6. It is always necessary to consider whether the applicant has an arguable case, that is to say to consider the prospects of the applicant succeeding in the appeal: Hughes v National Trustees Executors and Agency Co of Australasia Ltd (supra) at 263-4; Gallo v Dawson (supra) at 480. It must be emphasized that this list is not exclusive. Other cases might call for the consideration of other factors. Those which I have mentioned are relevant to the determination of this application.
[11] (SASC, Debelle J No S3865, 12 March 1993, unreported, BC9300I98).
More recently, in Spurway v The Police[12] Blue J summarised the relevant principles in the following terms:[13]
[12] [2011] SASC 177.
[13] Ibid at [22].
1.   The question whether or not an extension of time should be granted involves an exercise of discretion, which should not be circumscribed by fixed and binding rules.[14]
[14] Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516 at 539 per Kirby J; Police v Warren [2000] SASC 285 at [17] per Gray J.
2.   An applicant for an extension must bring forward material to show why the appeal was not filed within time and why the application for an extension ought to be granted.[15]
3.   Prejudice suffered by the other party by reason of the delay is a factor tending against exercise of the discretion to extend time.[16]
4.   Where the delay is substantial, the applicant must give a detailed explanation for the delay.[17]
5.   Where the delay is substantial, the applicant must establish either:
(a)    That the delay was caused through exceptional circumstances or some untoward vicissitude of life which prevented the applicant from applying his or her mind to the question of appeal;[18] or
(b)    Otherwise, that on the merits the appeal would be likely to succeed.[19]
6.   The overriding question is whether, if an extension is not granted, there will be a miscarriage of justice.[20]
Findings
[15] R v Foster (1996) 187 LSJS 135 at 138 per Lander J.
[16] Gikas v Police [1999] SASC 139; (1999) 202 LSJS 301 at 306 per Lander J.
[17] R v Brown [1963] SASR 190 at 191 per Napier CJ, Millhouse and Hobarth JJ; R v Foster (1996) 187 LSJS 135 at 139 per Lander J.
[18] R v Hatfield [1971] Crim LR 700; R v Balchin (1974) 9 SASR 64 at 65 per Hogarth ACJ, Bright and Walters JJ; Police v Warren [2000] SASC 285 at [17] per Gray J.
[19] R v Marsh (1935) 25 Cr App R 49; R v Balchin (1974) 9 SASR 64 at 65 per Hogarth ACJ, Bright and Walters JJ; R v Foster (1996) 187 LSJS 135 at 139 per Lander J.
[20] R v Trotter (1979) 22 SASR 64 at 65 per Walters J; R v Armstrong (1983) 35 SASR 356 at 367 per Matheson and Johnston JJ; R v Foster (1996) 187 LSJS 135 at 140 per Lander J.

The delay in the present case, of over four months, was not insubstantial. Mr Bryant argued that any delay experienced by the Respondent would not have prejudiced him because interest accrues on the judgment. The difficulty with that argument is that the Respondent is an apparently poor man. Timely payment is likely to have eased his immediate pressing financial circumstances.
I was not impressed by the Applicant’s explanation for the delay, namely, that he did not receive the Tribunal’s reasons through the post. As observed above, there is an onus on an applicant to put before the Court material justifying an extension. The Applicant’s accountant was not called to give evidence. In the circumstances there are no proper grounds for inferring that the accountant did not receive the Tribunal’s reasons or that for some reason, inconsistent with previous practice, he failed to forward them to the Applicant.
The Applicant’s suggestion that the Tribunal’s reasons may have been stolen from his letterbox was not a satisfactory one. The Applicant sought to reinforce that suggestion by describing interferences with his letterbox which resulted in him trying to repair the letterbox and reporting the the matter to the police and to his landlord, the Housing Trust. However, when pressed as to the timing of those events he disclosed, as discussed above, that they occurred during a period of two months prior to September 2014, i.e. well after he had instituted the present proceedings.
I am not persuaded that the Applicant did not receive the Tribunal’s written reasons in the post shortly after 19 December 2013. In my view it is likely that he chose to ignore the compensation order until action was taken against him in the Magistrates Court.
Mr Bonig, for the applicant, was also critical of the delay that occurred post service of the summons. He submitted that, even if it were true that the Applicant did not see the Tribunal’s reasons until Mr Hoelscher had obtained a copy of them from the Port Adelaide Magistrates Court Registry on March 2014, there remained an insufficient explanation for the Applicant’s failure to file a Notice of Appeal within one month of that date.
Mr Bonig submitted that it should be inferred that a tactical decision was made to seek to have the Tribunal set aside its order rather than file an appeal in this Court. I accept that submission. However, that decision should be attributed to the Applicant’s solicitors, rather than the Applicant. It is reasonable to assume that he was guided by their advice. As the Applicant remarked in cross-examination: ‘I left it to my lawyers. This is Chinese to me’. I am not prepared to attach much significance to the delay occasioned by the application to the Tribunal to have its order set aside.
In determining whether the application for an extension should be granted, I have considered whether, on the merits of the appeal, the Applicant has an arguable case. It cannot be said that the arguments advanced by the Applicant are devoid of merit. However, the delay was not insubstantial and the reasons for the Applicant having failed to lodge an appeal within one month of the Tribunal’s order were unconvincing and unjustifiable. For these reasons I refuse the application for extension.
It should be observed that even if I had granted the application, I would have rejected the substantive appeal for reasons to which I now turn.
Grounds of appeal
Before I canvass the parties’ competing arguments on the merits of the appeal, it is appropriate to refer to key provisions in the RTA.
Relevant provisions
Section 110(1) gives the Tribunal powers that may be exercised in a ‘tenancy dispute’. They include the power to make a compensation order (s 110(1)(c)) and to declare that a residential tenancy has been validly terminated (s 110(1)(e)), both of which the Tribunal purported to exercise in the present case.
Section 3 defines a ‘tenancy dispute’ as follows:
(a) a claim under a residential tenancy agreement, a rooming house agreement, or an agreement collateral to a residential tenancy agreement or a rooming house agreement; or
(b) a dispute between parties or former parties to a residential tenancy agreement, a rooming house agreement, or an agreement collateral to a residential tenancy agreement or a rooming house agreement, about matters arising under the agreement or this Act.
As earlier set out,[21] s 3 defines such a residential tenancy agreement as an agreement (other than a rooming house agreement) under which a person grants another person, for ‘valuable consideration’, a right (which may not be an exclusive right) to occupy premises for the purposes of residence.
[21] [15].
The RTA does not define the expression ‘valuable consideration’. However, there is no reason to believe that it should not be given the meaning attributed to it in contract law. In Beaton v McDevitt,[22] Kirby P explained the concept of consideration:[23]
The modern theory of consideration has arisen from the notion that a contract is a bargain struck between the parties by an exchange. By that modern theory, consideration must be satisfied in the form of a price in return for the promisor’s promise or quid pro quo. The price can be in the form of an act, forbearance or promise.
[22] (1987) 13 NSWLR 162.
[23] (1987) 13 NSWLR 162 at 168.
Section 5(1) expressly exempts various agreements from the scope of the legislation. The sub-section states:
5 – Application of Act
(1) This Act does not apply to –
(a)an agreement giving a right of occupancy in-
(i)a hotel or motel; or
(ii)an educational institution, college, hospital or nursing home; or
(iii)club premises; or
(iv)a home for aged or disabled persons administered by an eligible organization under the Aged or Disabled Persons Care Act 1954 of the Commonwealth; or
(v)a retirement village within the meaning of the Retirement Villages Act 1987; or
(vi)a supported residential facility within the meaning of the Supported Residential Facilities 1992; or
(ab) an agreement to which the Residential Parks Act 2007 applies; or
(b)an agreement (other than a rooming house agreement) under which a person boards or lodges with another; or
(c)an agreement genuinely entered into for the purpose of conferring on a person a right to occupy premises for a holiday; or
An agreement conferring a right to occupy premises for affixed term of 60 days or longer will be taken, in the absence of proof to the contrary, not to have been genuinely entered into for the or the purpose of conferring a right to occupy premises for a holiday.
(d)an agreement conferring a right to occupy premises for the purpose of residence but under which no rent is payable; or
Example-
An agreement under which families exchange houses for an agreed period-would not be a residential agreement if no rent was payable under the agreement.
(e)an agreement for the sale of land that confers a right to occupy premises on a party to the agreement; or
(f)a mortgage; or
(g)an agreement arising under a scheme in which-
(i)a complex of adjacent premises is owned by a company; and
(ii)the premises are let by the company to persons who jointly have a controlling interest in the company; or
(h)a prescribed agreement or an agreement of a prescribed class.
(my underlining)
It is clear from s 5(1)(d) that the Tribunal has no powers in relation to tenancy disputes arising under an agreement if no rent is payable under the agreement. Rent is defined in s 3 as follows:
rent consists of –
(a) The amount payable under a residential tenancy agreement for the right to occupy premises for a period of the tenancy…
(my underlining)
The parties’ arguments
On the merits of the appeal, the Applicant, did not seek to challenge the Tribunal’s findings:
(i)that the parties had verbally agreed that the Respondent had the right to live on the property for valuable consideration, namely, payment of the property’s water bills and maintenance of the property; and
(ii)that the agreement constituted a ‘residential tenancy agreement’, as defined in s 3.
However, Mr Bryant argued that the Tribunal erred by purportedly failing to have regard to the exemption in s 5(1)(d). He contended that:
· the Respondent’s maintenance of the property did not constitute rent because it was not an ‘amount payable’ under the agreement.
· the Respondent’s payment of water rates, though involving the payment of money, did not amount to rent because the payment of statutory charges is not regarded as rent under the RTA.
Mr Bonig for the Respondent submitted:
·first, that s 5(1) should not be construed as applying to residential tenancy agreements; and
·secondly, that even if it does apply to such an agreements, the Respondent’s agreement was not exempted because the payment of water rates and/or maintenance of the property were rent payments.
Consideration
Mr Bonig’s first proposition must be rejected. The exemption in s 5(1)(d) applies to an ‘agreement’. It is not restricted to agreements other than residential tenancy agreements. Indeed, the example of an exempt agreement contained in s 5(1)(d) is one of a residential tenancy agreement under which both parties receive valuable consideration but no rent is paid.
In my view, the Respondent’s agreement with the Applicant would fall within the scope of s 5(1)(d) if, as a matter of law, it was not open to the Tribunal to find that neither the Respondent’s maintenance work nor his payment of water rates amounted to rental payments. It is necessary to consider each of these issues separately.
Maintenance
The RTA does not define an ‘amount payable’. Mr Bryant argued that the expression should be construed as referring exclusively to the payment of money. He submitted that this interpretation is consistent with other references to ‘rent’ in the RTA which relate to the payment of money from a tenant to a landlord.
In particular, Mr Bryant relied upon Div. 3 Part 4 of the RTA which governs the mutual rights and obligations of landlord and tenant in relation to rent. The effect of these provisions may be summarised as follows:
·Section 53 makes it an offence for a landlord to require or receive from a tenant or a prospective tenant a payment, other than rent or security, for a residential tenancy or the renewal or extension of a residential tenancy.
·Section 54(1) and (2) makes it an offence for a landlord to require payment of rent more than two weeks in advance under a residential tenancy agreement.
·Section 55(1) and (2) prohibit a landlord increasing rent unless authorized to do so under a residential tenancy agreement and then subject a minimum written notice of 60 days.
·Section 56(1) gives the Tribunal power to declare that the rent payable under a tenancy agreement is excessive and if appropriate to fix a new rental. In deciding whether rent payable is excessive the Tribunal must have regard to a number of specified considerations including ‘the general level of rents for comparable premises’ (s 56(2)).
·Section 57 makes it an offence for a landlord to fail to keep a proper record of rent received under a residential tenancy agreement (s 57(1)) or to make a false entry in a record of rent (s 57(2)).
·Section 58(1) makes it an offence for a landlord to fail to give a person paying the rent a receipt stating the date on which the rent was received, the name of the person paying the rent, the amount paid, the period of the tenancy to which the payment related and the address of the premises to which the payment relates. There is no obligation to comply with this requirement if the tenant pays the rent into an account kept by the landlord or the landlord’s agent (s 58(2)).
·Section 59 stipulates that rent payable under a residential tenancy agreement accrues from day to day.
·Section 60 allows a landlord to distrain a tenant’s goods for non-payment of rent.
Mr Bryant further relied on s 80(1) which enables a landlord by written notice to require a tenant to give up possession of premises if the tenant has breached a residential tenancy agreement. Where the breach involved a failure to pay rent the tenant may remedy the breach by payment of the unpaid rent (s 80(2)).
Though not expressly relied on by Mr Bryant, reference should also be made to Div 4. Pt 4 which regulates security bonds. Section 61(1) makes it an offence for a landlord to require the payment of a security bond exceeding the relevant limit. The relevant limit is determined by reference to the amount of rent payable under a residential tenancy agreement (s 61(3) and (4)). Section 62(1) makes it an offence for a landlord to fail to pay the amount of the security to the Commissioner of Consumer Affairs. Section 63 deals with applications to the Commissioner by either the tenant or the landlord for the payment of the whole amount or a specified amount of the security held by the Commissioner.
In my view, when the legislative scheme is viewed as a whole it is apparent that Parliament intended an ‘amount payable’ to be a monetary amount. This does not mean that actual payment of the rental amount must be in the form of money. Plainly, payment of a monetary amount to a landlord under a residential tenancy agreement may be made in cash, by cheque or some other negotiable instrument. In my view, payment may also be made through the tenant giving something in lieu of money. For example, the landlord may agree to accept from the tenant goods or services in lieu of the monetary amount payable under the agreement.
As far as counsels’ researches, and mine, have been able to determine, there are no previous decisions of the District and Supreme Courts (SA) that have considered this issue. I note that the view has been expressed in the context of the Residential Tenancies Act 1987 (NSW) that it is sufficient if there is an agreement that the residential occupation is in satisfaction of wages.[24] However, authorities dealing with the RTA (NSW) may be of limited assistance because under that legislation payment of rent is not an essential element of a ‘residential tenancy agreement’ so long as the right of occupation is granted for value.[25] In other words, while the definition of a residential tenancy agreement in the RTA (NSW) is similar to that contained in s 3 of the RTA (SA) there is no counterpart to s 5(1)(d) which exempts agreements under which no rent is payable.
[24] P. Butt, Land Law, 6^th ed. Lawbook Co, 2010 at [24.25] Benecke,”Trouble Brewing Down on the Farm Cottage” [1991] NSW Law Soc J (Feb) 80.
[25] See Grundel v Registrar General (1990) 5 BPR 11,217 (NSWSC - McLelland J).
In any event I am of the view that a landlord may agree to accept from the tenant goods or services in lieu of the monetary amount payable under the agreement. However, in the present case, there was no evidence before the Tribunal that the parties had agreed that the tenant should pay an amount or a proportion of an amount (rent) that could be satisfied by the Respondent performing maintenance work.
For these reasons I believe that the Tribunal erred in construing that work as rent.
Water rates
In my opinion, the Respondent’s payment of water rates satisfies the definition of rent in s 3 in that the billed amounts constituted monetary amounts payable under the parties’ agreement. However, Mr Bryant argued that provisions in the RTA regulating the payment of statutory charges, including water rates, indicate that they are not to be regarded as rent for the purposes of the legislation.
The relevant sections are as follows:
53- Permissible consideration for tenancy agreement
(1)A person must not require or receive from a tenant or prospective tenant a payment, other than rent or security (or both), for a residential tenancy or the renewal or extension of a residential tenancy.
Maximum penalty: $500.
(2)However—
(a)the landlord may lawfully require or receive consideration for an option to enter into a residential tenancy agreement but, in that case, the following condition applies:
(i)if the prospective tenant enters into the residential tenancy agreement, the landlord must apply the consideration towards rent payable under the agreement;
(ii)if the prospective tenant does not exercise the option to enter into the residential tenancy agreement, the landlord may retain the consideration; and
(b)the landlord may require the tenant to reimburse the landlord for rates and charges for water supply that are to be borne by the tenant under the residential tenancy agreement or a collateral agreement; and
(c)the landlord may lawfully require or receive a payment of a class the landlord is authorised to require or receive by another provision of this Act or under the regulations.
73 - Rates, taxes and charges
(1)It is a term of a residential tenancy agreement that the landlord must bear all statutory rates, taxes and charges imposed in respect of the premises.
(2)However, subject to subsection (4), rates and charges for water supply are to be borne as agreed between the landlord and the tenant.
(3)In the absence of an agreement—
(a)the landlord will bear the rates and charges for water supply up to a limit fixed or determined under the regulations; and
(b)any amount in excess of the limit is, subject to subsection (4), to be borne by the tenant.
(4)A landlord must, as soon as is reasonably practicable after obtaining the benefit of the water security rebate amount, ensure that an amount borne by a tenant under an agreement under subsection (2) or under subsection (3)(b) is reduced by-
(a)in the case of a tenant on land held as a single title consisting of a single place of residence—the water security rebate amount; or
(b)in the case of a tenant on land held as a single title consisting of more than 1 place of residence—the proportionate water security rebate amount,
(and if the reduction under this subsection results in a negative amount, 0 is to be substituted for that amount).
(5)If, during the billing period in which a landlord obtained the benefit of the water security rebate amount, the premises to which the rebate relates were subject to more than 1 residential tenancy agreement, the landlord must ensure that a reduction under subsection (4) is applied to the amount borne by a tenant under each tenancy agreement on a pro rata basis according to the number of days in the billing period in which each tenancy agreement respectively applied at the premises.
(6)In this section—
proportionate water security rebate amount, in relation to a tenant on land held as a single title consisting of more than 1 place of residence, is the amount that results from dividing the water security rebate amount for that title by the number of places of residence at the land to which the title relates;
water security rebate amount, in relation to rates and charges for water supply to residential premises, means the amount specified in an account for those rates and charges (whether before or after the commencement of this definition) as representing the rebate for water security purposes.
Section 53 makes it an offence for a landlord to require or receive from a tenant or a prospective tenant a payment, other than rent or security, for a residential tenancy or the renewal or extension of a residential tenancy. However, by virtue of s (2)(b) no such offence is committed where the landlord requires reimbursement from the tenant for rates and charges for water supply that are to be borne by the tenant under the residential tenancy agreement.
Section 73(1) stipulates that the landlord is required to bear all statutory rates, taxes and charges imposed in respect of the premises. However, the landlord and tenant may make an agreement about the payment of rates and charges for water (s 73(2)) and, in the absence of an agreement, the landlord will bear an amount for water supply calculated under the regulations (s 73(3)).

To my mind, these provisions do not indicate, contrary to Mr Bryant’s submission, that an agreement relating to statutory charges, including water rates, is necessarily collateral to an agreement pertaining to rent. The provisions merely contemplate that an agreement relating to statutory charges may be collateral in nature depending upon the nature of the agreement between the landlord and tenant. In other words, an agreement relating to statutory charges will be a collateral agreement in the absence of an agreement to the contrary.
In the present case, the Tribunal concluded that the parties had reached an agreement that the Respondent would pay the water rates. The Applicant benefited from that arrangement to the extent that the Respondent paid for the water used by him and any water used by the Applicant (say to grow his vegetables). Furthermore, the Respondent paid for the portion of the bill comprising a fixed charge for the service costs of delivering water to the property which had to be paid regardless of whether water was consumed.[26]
[26] See s 65B Waterworks Act 1932.
The Respondent’s payment of the water rates constituted ‘valuable consideration’ for the right to occupy the property. The agreement amounted to a residential tenancy agreement as defined in s 3. The payment of water rates also constituted an amount payable under the agreement and thus constituted rent as defined in s 3. Accordingly, the agreement was not exempted under s 5(1)(d). On this basis, the Tribunal correctly found that a residential tenancy agreement existed between the Applicant and the Respondent.
I note that under the RTA (NSW) it has been held that, for the purposes of establishing a residential tenancy agreement, an agreement by the occupant to pay rates and levies is sufficient consideration.[27]
[27] Grundel v Registrar General (1990) 5 BPR 11,217 (McLelland J) see also P. Butt, Land Law, 6^th ed. Lawbook Co, 2010 at [24.25].
Orders
1Application for extension of time refused.
2The orders of the Tribunal affirmed.
3The Applicant to pay the Respondent’s costs of this appeal.