Servaas v Taylor

[2015] NSWCATCD 154

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Servaas v Taylor [2015] NSWCATCD 154
Hearing dates:	10 December 2015
Decision date:	30 December 2015
Jurisdiction:	Consumer and Commercial Division
Before:	Margaret Mary McCue, General Member
Decision:	1. The application for termination and possession is dismissed.  2. The claim for payment of water usage charges is dismissed.
Catchwords:	Termination of lease and possession of premises – defect in notice - Residential Tenancies Act 2010
Legislation Cited:	Part 5, Schedule 4, Civil and Administration Act, 2013; Residential Tenancies Act 2010; Sections: 6; 13; 39; 80; 82; 84, 87; 88; 113; 190 (1) Residential Tenancies Act 2010 Sections 9, 76, Interpretation Act (NSW) 1987
Cases Cited:	Cain v NSW Land v- Housing Corporation [2014] NSWCA 28; Walker & Orton v Thompson & Henderson (Tenancy) [2011] NSWCTTT 212 (23 May 2011) RTA v Swain [1997] NSWSC181
Texts Cited:	Residential Tenancies Law and Practice New South Wales [5th Edition] Anforth, Christensen and Taylor
Category:	Principal judgment
Parties:	Elsie May Servaas (applicant) Leanne Taylor (respondent)
File Number(s):	RT 15/63108
Publication restriction:	Nil

reasons for decision

Application

1. The applicant seeks an order for termination of a residential tenancy agreement and an order for possession of premises located in Portland, New South Wales. The application is founded upon a breach for non-payment of rent. A notice of termination was served pursuant to section 88 Residential Tenancies Act, 2010. Additionally, the applicant seeks an order for the payment of water consumption arrears.

Jurisdiction

2. On the establishment date, 1 January 2014, the Civil and Administrative Legislation (Repeal and Amendment) Act 2013 amended certain statutes which previously conferred jurisdiction on now “abolished” tribunals. NCAT has jurisdiction to hear and determine relevant matters in place of the “abolished” tribunals.

3. From 1 January 2014, the Residential Tenancies Act 2010. [“RT Act”] was amended. The definition of "Tribunal" was changed in that Act from the CTTT to NCAT - see cl 4.34 item [2] in Schedule 4 to the Civil and Administrative Legislation (Repeal and Amendment) Act.

4. As a result of the amendments, from 1 January 2014, I am satisfied that NCAT has jurisdiction to hear the application made pursuant to the provisions of the RT Act.

Appearances

5. The applicant lives in Western Australia and made an application to the tribunal for a telephone hearing. The respondent lives in rural New South Wales, at Portland, near Bathurst. Both parties were directed to attend the hearing by telephone.

6. The applicant provided a contact telephone number for the respondent in the application to the tribunal. The tribunal attempted to contact the respondent on 10 December 2015 at that telephone number, though without success.

7. On 30 November 2015, the tribunal had posted the respondent’s notice of hearing to 79 Williwa Street Portland in New South Wales. The notice advised the respondent that a telephone hearing was listed at the Penrith registry on 10 December 2015. The notice further stated that the tribunal may make orders in your absence including final orders [if you do not attend].

8. The tribunal was satisfied that the respondent was deemed served with the notice of hearing on the 4th business day after 30 November 2015. The respondent did not attend. The matter was heard in her absence.

The residential tenancy agreement

9. The applicant was contacted by phone and was assisted by her daughter, Tanya Servaas, who gave evidence on the applicant’s behalf. The applicant’s submissions, for the greater part, relied upon documents that accompanied the application [filed on 12 November 2015] to support the orders sought in the application.

10. On perusal of the documents, the tribunal commented that no written residential tenancy agreement was included in the application.

11. The applicant’s daughter submitted that there was no written residential tenancy agreement entered into between the parties, but rather that the parties had entered into an oral agreement in relation to the respondent’s occupation of the residential premises in Portland more than 10 years ago. The applicant was uncertain about the precise date of commencement of the agreement.

12. The applicant said that the respondent was required to pay to the applicant the sum of $75.00 per week pursuant to the oral agreement for the occupation of the residential premises.

13. The applicant also relied upon a hand written note sent to the respondent sometime in August 2014 to support the proposition that the respondent occupied the premises for value. The note said:

I am writing to you again, I haven’t heard from you yet, putting up the rent from 14 September 2014 to $ 100 a week

14. The documents, attendant to application, were photographs of the original documents, as I understand. It was difficult to read some of the documents, however, suffice to say that there were letters from the applicant to the respondent dated between November and December 2014, referenced at appendix 5 of the applicant’s documents.

15. The substance of the letters addressed the manner of payment of the rent, or rather, that there was some departure from the agreement to pay rent, after the rent increased from $ 75.00 per week to $100.00 in September 2014.

16. The applicant wrote to the respondent on 8 September 2015. The letter stated that:

as of September 2014, the agreement was that you would pay $100 per week rent. ….. In the future payments of $100 per week must be made weekly as previously agreed, otherwise, I will be forced to terminate this agreement.

Section 13 Agreements that are residential tenancy agreements

17. The Act provides that:

"residential tenancy agreement" is an agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence.

(2) A residential tenancy agreement may be express or implied and may be oral or in writing, or partly oral and partly in writing.

(4) For the purpose of determining whether an agreement is a residential tenancy agreement, it does not matter that the person granted the right of occupation is a corporation if the premises are used (or intended for use) as a residence by a natural person.

18. Section 6 of the Act further provides that the Act applies to residential tenancy agreements made before or after the commencement of the section.

19. In light of the oral evidence, and the letters of September 2014, and 8 September 2015, the tribunal finds that there was an oral agreement entered into over 10 years ago between the applicant and the respondent that obliged the tenant to pay to the landlord the sum of $ 75.00 per week [now increased to $100.00 per week] and granted the tenant a right of occupation of the residential premises located at Portland.

The notice of termination

20. On 14 October 2015, the applicant sent a letter, by registered post, to the respondent’s address in Portland. The applicant submitted that in drafting the letter, “the notice of termination” she had taken advice from the Department of Fair Trading and was confident that the notice satisfied the requirements of the Act for the tribunal to make an order for termination and possession.

21. The letter of 14 October, made reference to a letter dated 8 September 2015, wherein the applicant had advised the respondent that the outstanding rent for the premises was $ 2,600.00. The letter further stated that:

I would like to inform you that I am giving you 14 days notice to vacate the above premises based on a breach of the tenancy agreement for non-payment of rent. Please vacate the premises by 6 November 2015.

The “notice” further stated that you are required to pay all outstanding rent due by this date.

The “notice” said that the total amount of rent due was $ 3,400.

22. There was a reference to payment of a water bill which I shall deal with later in the context of the applicant’s additional claim for payment of past water consumption bills.

23. In the first letter forwarded to the respondent in September, the applicant said that:

I have made a decision to get a real estate agent to manage the rental of this property.

24. The October letter service said:

When you vacate the premises by 6 November please return the keys to Vivian Hudson, Ray White, Main Street.

The arrears

25. As part of the evidence to support the application for termination and possession, the applicant relied upon her recording of payments of rent for the premises and sought recovery of “arrears” spanning over a period from January 2014 to 19 October 2015. The receipt of the monies was not posted on a “running account basis” but rather posted to the week of the receipt of the payment. A notation at the appendix provided that the amount owing was greater than that set out in the “letter” [“notice”] dated 14 October 2015. The applicant attributed this to a miscalculation of the amounts [owing] as set out in the first letter sent to the respondent in September 2015, foreshadowing the service of a “notice” in the event that certain monies were not paid.

26. The last receipt noted that $ 100.00 was paid on 21 October 2015.

27. The tribunal directed the applicant’s attention to Section 190 (1) of the Act regarding the claim for the arrears. The section provides that:

190 Applications relating to breaches of residential tenancy agreements

(1) A landlord or a tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations.

(2) An application may be made:

(a) during or after the end of a residential tenancy agreement, and

(b) whether or not a termination notice has been given or a termination order made.

(3) A landlord’s agent may make an application on behalf of a landlord.

28. For the purposes of section 190 (1) of the Act, the prescribed period for making an application for an order in relation to a breach of a residential tenancy agreement or proposed agreement is within 3 months after the applicant becomes aware of the breach. [reg 22 (7)].

29. Clearly the landlord is in breach of the section. If the landlord wishes to claim the arrears dating back to January 2014 as part of the application, the applicant will need leave of the tribunal to extend the time to recover those amounts. No application for leave was made in the application filed on 12 November 2015.

The Act and its relevant provisions –general provisions of Act

30. A termination notice is defined at section 80 of the Act and means a notice terminating a residential tenancy agreement.

General provisions regarding the content of a termination notices are set out at section 82 of the Act. The section is set out as follows:

Section 82 Termination notices

A termination notice must set out the following matters:

(a)    the residential premises concerned,

(b)    the day on which the residential tenancy agreement is terminated and by which vacant possession of the premises is to be given,

(c)   if the notice is not given under section 84, 85, 96 or 97, the ground for the notice,

(d)    any other matters prescribed by the regulations.

(2)    A termination notice must be in writing and be signed by the party giving the notice or the party’s agent.

(3)    A termination notice for a periodic agreement may specify a day other than the last day of a period for the payment of rent as the termination date.

Section 87 - Breach of agreement

(1) A landlord may give a termination notice on the ground that the tenant has breached the residential tenancy agreement.

(2) The termination notice must specify a termination date that is not earlier than 14 days after the day on which the notice is given.

(3) The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement.

(4) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that:

(a) the tenant has breached the residential tenancy agreement, and

(b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement, and

(c) the termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice.

31. The applicant relies upon a breach for non-payment of rent and the provisions of section 88 apply.

Section 88 - Termination notices for non-payment of rent provides as follows:

88 Termination notices for non-payment of rent

(1) A termination notice given by a landlord on the ground of a breach of the residential tenancy agreement solely arising from failure to pay rent (a

"non-payment termination notice" ) has no effect unless the rent has remained unpaid in breach of the agreement for not less than 14 days before the notice is given.

(2) A non-payment termination notice is not ineffective merely because of any failure of the landlord or the landlord’s agent to make a prior formal demand for payment of the rent.

(3) A non-payment termination notice must inform the tenant that the tenant is not required to vacate the residential premises if the tenant pays all the rent owing or enters into, and fully complies with, a repayment plan agreed with the landlord, unless the Tribunal makes a termination order on the basis that the tenant has frequently failed to pay rent on time.

32. As preliminary matter, the tribunal needs to be satisfied that:

1. The rent remained unpaid in breach of the agreement for not less than 14 days; and

2. That the termination date is not less than 14 days from the date the notice was given.

33. The applicant relied upon the “deeming” provisions of the postal service rule for the calculation of the date of termination. [s 76 – Interpretation Act]. The date of deemed service was noted as 21 October 2015, [the fourth working day after the letter was posted] and the date of termination, 6 November 2015, was calculated as being not less than 14 days before the notice was given [notwithstanding that the letter was sent by registered post].

Additional matters

34. Where a notice of termination is served for non-payment of rent pursuant to section 88 of the Act, there are some additional provisions that must be included in the notice. The Act provides that:

a non-payment termination notice must inform the tenant that the tenant is not required to vacate the residential premises if the tenant pays all the rent owing or enters into, and fully complies with, a repayment plan agreed with the landlord, unless the Tribunal makes a termination order on the basis that the tenant has frequently failed to pay rent on time.

35. Section 9 Interpretation Act (New South Wales) provides some guidance in the interpretation of the word must. The section is as follows:

Meaning of may and shall

(1)    In any Act or instrument, the word “may”, if used to confer a power, indicates that the power may be exercised or not, at discretion.

(2)    In any Act or instrument, the word “shall”, if used to impose a duty, indicates that the duty must be performed.

36. The interpretation of the word “must” was considered in Cain v Housing NSW at paragraph 25. “Must” was an element of ordinary English usage:

The difference in effect between "may" and "must" (or "shall", being the term identified as imposing a duty in s 9(2) of the Interpretation Act) does not depend upon the existence of s 9 of the Interpretation Act; it is an element of ordinary English usage.

Nor did the distinction escape the drafter of the Residential Tenancies Act, which uses the language of power and the language of obligation with, to all appearances, deliberate precision: cf the use of "must" in ss 84(3) and 85(3).

Can the absence of the wording at section 88 (3) in the notice of termination dated 14 October 2015, be cured by the application of section 113 of the Act?

Defects in termination notices

37. Section 113 of the Act provides as follows:

The Tribunal may make a termination order for a residential tenancy agreement or any other order even though there is a defect in the relevant termination notice or the manner of service of the notice if:

(a) it thinks it appropriate to do so in the circumstances of the case, and

(b) it is satisfied that the person to whom the notice was given has not suffered any disadvantage because of the defect in the notice or service or that any disadvantage has been overcome by the order and any associated order.

38. Some judicial guidance was provided in the interpretation of section 66 (2 )[of the Act] cast in similar, though not identical, terms to section 113. Meagher JA in RTA v Swain [1997] NSWSC181, affirmed that the provisions of section 66 extended to defects of substance of a notice of termination. In Walker & Orton v Thompson & Henderson (Tenancy) [2011] NSWCTTT 212 (23 May 2011) the Tribunal made a specific performance order [rather than a termination order with a re-list to consider whether the lease should be terminated] where the defect was the absence of the wording at section 88 (3). In that case, the tribunal sought guidance from section 87 (5) of the Act, in considering whether section 113 should be applied to “cure” any defect in the notice. The section is set out below:

Section 87 (5)

The Tribunal may consider (but is not limited to considering) the following:

(a)   the nature of the breach,

(b)    any previous breaches,

(c)   any steps taken by the tenant to remedy the breach,

(d)   any steps taken by the landlord about the breach,

(e)    the previous history of the tenancy.

39. The tribunal makes the following findings addressing matters raised for consideration in section 87 (5) as to whether the applicant is entitled to the order for termination given the defect in the notice [Walker & Orton v Thompson & Henderson (Tenancy) [2011] NSWCTTT 212 (23 May 2011)].

40. From the applicant’s evidence, there was a general informality about the manner in which the applicant dealt with the respondent for any departure from the agreement during the term of the lease, more particularly over the last 20 months. (5) (a) and (b).

41. The tenant continued to pay rent over the period from January 2014 to date during certain months (c). The applicant sent a number of “letters” to the respondent raising issues regarding the irregular payment of rent though took no steps to serve a “notice of termination” for non-payment of rent until the notice/letter dated 14 October 2015 (d). The life of the tenancy spanned over 10 years. The rent remained $ 75.00 per week until September 2014 (e).

42. The Act provides that the matters set out in section 87 (5) are not the only matters for consideration in the context of the section. The form of the letter sent by the applicant to the respondent on 14 October 2015, was not described as a notice of termination for non-payment of rent. It was of some importance that the prescriptive words of section 88 (3) of the Act be included in that notice apprising the respondent that she did not have to leave the premises if she paid all the rent owing. On the applicant’s evidence there was a miscalculation of the precise amount of the rent owing. Unless the applicant sought leave to extend the time for claiming the amount of all the arrears, the respondent would not be obliged to pay the “amount of arrears” set out in the applicant’s notice.

43. On those findings, the tribunal is disinclined to apply section 113 to “cure” the defect in the notice. The Tribunal is not satisfied that it is appropriate to make an order for termination and possession in the circumstances of the case, and cannot make a finding that the person to whom the notice was given has not suffered any disadvantage because of the defect in the notice or service or that any disadvantage has been overcome by the order and any associated order.

Order

44. The application for an order for termination and possession for the residential premises is dismissed.

Other orders

45. The applicant also sought an order for recovery of payment of water usage of $ 3,791.54. Water payment receipts where attendant to the application. The dates on the receipts were illegible for the greater part.

Although the tribunal made a finding that the respondent was obliged to pay rent, the agreement was silent as to whether the respondent was obliged to pay for water usage. The applicant’s daughter said that Fair Trading had advised her that water efficiency measures needed to be in place at the rental property for the tenant to be obliged to pay for water consumption. Ms Servaas admitted that the landlord was never informed of the amendments to the Act. On that basis, the applicant pressed for the tenant to pay the water consumption charges.

46. The relevant provision, Section 39 of the Act, is set out below:

39 Water usage charges payable by tenant

(1) A tenant must pay the water usage charges for the residential premises, but only if:

(a) the premises are separately metered or the premises are not connected to a water supply service and water is delivered to the premises by vehicle, and

(b) the premises contain water efficiency measures prescribed by the regulations for the purposes of this section, and

(c) the charges do not exceed the amount payable by the landlord for water used by the tenant.

(2) A tenant is not required to pay the water usage charges unless the landlord gives the tenant a copy of the part of the water supply authority’s bill setting out the charges, or other evidence of the cost of water used by the tenant.

(3) A landlord must give the tenant not less than 21 days to pay the water usage charges.

(4) A tenant is not required to pay the water usage charges if the landlord fails to request payment from the tenant within 3 months of the issue of the bill for those charges by the water supply authority.

(5) Subsection (4) does not prevent a landlord from taking action to recover an amount of water usage charges later than 3 months after the issue of a bill for those charges, if the landlord first sought payment of the amount within 3 months after the issue of the bill.

(6) A landlord must ensure that the tenant receives the benefit of, or an amount equivalent to, any rebate received by the landlord in respect of any water usage charges payable or paid by the tenant.

Note: Tenants under social housing tenancy agreements may be subject to different provisions in relation to the payment of charges for water usage (see Division 3 of Part 7).

(7) This section is a term of every residential tenancy agreement.

47. The applicant’s letter dated 8 September 2015 states as follows:

I would like to arrange for a plumber to visit the property to ensure that all taps have a water ratio of or rather rating of three stars

48. On the applicant’s evidence, the tribunal is not satisfied that the premises are water efficiency compliant to oblige the respondent to pay for water usage charges.

Order

1. The application for payment of water charges is dismissed.

Margaret Mary McCue

General Member

Civil and Administrative Tribunal of New South Wales

30 December 2015

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 12 February 2016