Wang v Kuzmanovic & Anor (Residential Tenancies)
[2023] ACAT 39
•19 July 2023
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
WANG v KUZMANOVIC & ANOR (Residential Tenancies) [2023] ACAT 39
RT 745/2022; RT 860/2022
Catchwords: RESIDENTIAL TENANCIES – where applicant was proprietor of premises but not lessor – where ex-wife of applicant was the agent for and lessor of the premises – where applicant attempted to displace agent as lessor – whether agent or applicant was lessor at material times – whether tenancy agreement purportedly entered into by applicant and tenants was the result of duress – purported tenancy void – agent remained lessor until departure of tenants from premises – applicant’s claims for rent and cleaning bound to fail – tenants’ counterclaim dismissed – bond discharged to tenants
Legislation cited: ACT Civil and Administrative Tribunal Act 2007 s 53
Evidence Act 2011 s 97
Residential TenanciesAct1997 ss 5, 6A, 8, 15, 29, 30, 30A, 31, 36, 64, 84, 133, Schedule 1, standard terms 52, 63, 64, 84, 96, 100
Residential Tenancies Legislation Amendment Act 2023
Statute Law Amendment Act 2022
Cases cited:Australian & New Zealand Banking Group v Karam [2005] NSWCA 344
Commercial Bank of Australia Ltd v Amadio [1983] HCA 14
Crescendo Management Pty Ltd v Westpac Banking Corp (1986) NSWLR 40
Jones v Dunkel [1959] HCA 8
Secola v McCann [2011] WASC 342
Thorne v Kennedy [2017] HCA 49
Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152
Texts/papers cited: Anforth et al, Residential Tenancies: Law and Practice in NSW (Federation Press, 7th edition, 2022)
Tribunal:Senior Member M Hyman
Date of Orders: 19 July 2023
Date of Reasons for Decision: 19 July 2023
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 745/2022
BETWEEN:
YAOXIANG WANG
Applicant/Lessor
AND:
JACQUELINE KUZMANOVIC
First Respondent/Tenant
ALEKSANDAR KUZMANOVIC
Second Respondent/Tenant
TRIBUNAL:Senior Member M Hyman
DATE:19 July 2023
ORDER
The Tribunal orders that:
The applicant is to pay the respondents the sum of $1,580, consisting of:
(a)$2,040 paid as rent under the invalid tenancy agreement; and
(b)$200 paid as advances on the bond for the premises under the invalid tenancy agreement;
(c)less $660 owed by the respondent/tenants to the applicant/lessor for repair to or replacement of the damaged cavity sliding door.
The counterclaim made by the respondents is dismissed.
The purported tenancy between the applicant and the respondents dated 11 August 2022 is declared void for duress.
………………………………..
Senior Member M Hyman
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 860/2022
BETWEEN:
YAOXIANG WANG
Applicant/Lessor
AND:
JACQUELINE KATRINA KUZMANOVIC
Respondent/Tenant
TRIBUNAL:Senior Member M Hyman
DATE:19 July 2023
ORDER
The Tribunal orders that:
The applicant is to pay to the respondents the sum of $2,040 held by him as bond paid under the invalid tenancy agreement.
………………………………..
Senior Member M Hyman
REASONS FOR DECISION
Introduction
This decision concerns residential tenancy arrangements in regard to a house in the suburb of Macquarie, ACT. It has come before the Tribunal through a confused and protracted path involving many different applications and decisions. The parties have on occasion attempted to bring other premises within the scope of the matter. But at its heart, it involves the house in Macquarie (the Macquarie premises), whose proprietor is Mr Wang (the applicant). For at least some of the time covered by the dispute, he may have been the lessor of the premises. The respondents, Ms Kuzmanovic and her father Mr Kuzmanovic, (identified by name or together as the tenants or the respondents) were at relevant times tenants in the premises at Macquarie.
Ms Kuzmanovic moved into the Macquarie premises in about early February 2022. Sometime after moving into the premises, she signed a residential tenancy agreement with Ms Shefang Bian (also known as Sophie), who is the ex‑wife of Mr Wang). Mr Kuzmanovic appears to have also been resident in the premises over the relevant part of the same period. In August 2022, Ms Kuzmanovic and her father entered into a new tenancy agreement for the Macquarie premises with Mr Wang. They left the premises on or about 9 September 2022. Mr Wang applied to the tribunal on 26 September 2022 seeking unpaid rent, including for the breaking of a fixed-term tenancy agreement, and for repairs, cleaning and rubbish removal. At the tribunal’s direction, he filed an amended application on 7 October 2022, which was the basis of the hearing leading to the present decision. Mr Wang is seeking $3,570 in unpaid rent, $4,245 for cleaning and rubbish removal and $660 for repairs to a damaged sliding door. Ms Kuzmanovic contests these claims, with the exception of the $660 (or otherwise reasonable cost) for repairing or replacing the sliding door, the damage to which is not contested. Ms Kuzmanovic contends that she entered into the tenancy agreement in August 2022 under duress, and that the agreement is therefore void; that she owes no rent once the payments that she made are taken into account; that the applicant has no proper basis for claiming the costs of cleaning and rubbish removal at the premises; and that the applicant owes her $200 for “bond advances” that he secured from her as co-payments with her rent while she waited for a bond loan application to be approved. Ms Kuzmanovic further seeks $5,000 for non-economic loss for Mr Wang’s breach of the tenancy agreement, specifically for loss of peace, comfort and privacy; and $1,000 for trespass at a separate property after she moved out of the Macquarie premises.
The above matters relate to RT 745/2022. In a separate matter, RT 860/2022, the parties seek to resolve to which of them $2,040 in bond paid by Ms Kuzmanovic for the Macquarie premises should be paid.
The hearing
The matter came before me on 8 March 2023. Mr Wang appeared in person. Ms Kuzmanovic also appeared in person, with Ms Tien Pham of Legal Aid as her representative. Mr Kuzmanovic did not appear. His daughter tendered a hand‑printed note, apparently signed by Mr Kuzmanovic, but not dated, reading as follows:
To whom it may concern
I apologies for my absence, as I have just started full time work as a truck driver & work away, I give permission for my daughter to speak on my behalf & answer any questions you may need information on, as she is a crown witness, thank you
Aleksandar Kuzmanovic(errors in original)
I return later to the implications of Mr Kuzmanovic’s evidently intentional absence.
Mr Wang acted as witness in his own cause. Ms Kuzmanovic also gave evidence and called Ms Bian, Mr Wang’s ex-wife, as a witness. There was a bundle of documentary evidence from each side. On the applicant’s side, in matter RT 745/2022, this comprised his initial application, an amended application (apparently undated but received by the tribunal on 7 October 2022), and numbered attachments to the amended application consisting of the brief tenancy agreement dated 11 August 2022,[1] a notice to remedy dated 21 September 2022,[2] photographs apparently taken in September 2022 after the tenants’ departure from the premises,[3] a photograph of the damaged cavity sliding door,[4] a quote for cleaning and rubbish removal,[5] a compilation of emails and text messages between Mr Wang and Ms Kuzmanovic,[6] a handwritten statement signed by Ms Kuzmanovic dated 11 August 2022,[7] a copy of the tenancy agreement between Ms Bian and Ms Kuzmanovic dated 17 April 2022,[8] and an exchange between Mr Wang and a member of the Australian Federal Police regarding the damaged door.[9] On the respondent’s side, a bundle was filed consisting of a large range of documents, paginated and identified in this decision as respondent’s documents and by the page numbers given. This bundle included witness statements from Ms Kuzmanovic and Ms Bian, identified separately as Exhibits R3 and R4 respectively; photographs, papers associated with other matters brought in the Tribunal, papers associated with court cases brought by Mr Wang or Ms Bian, email and text message exchanges, bank statements, and various other papers. Also available to me are records of other actions in the ACT Civil and Administrative Tribunal (ACAT) brought by one or other of the parties.
[1] Attachment A
[2] Attachment B
[3] Attachments C1-C3
[4] Attachment D
[5] Attachment E
[6] Attachments F1-F4
[7] Attachment G
[8] Attachment H
[9] Attachments I1-I13
I heard matters RT 745/2022 and RT 860/2022 together, and most of the papers in one matter are equally relevant to the resolution of the other. Ms Kuzmanovic obtained a bond loan to enable her to pay a bond of $2,040 to Mr Wang in respect of the tenancy agreement signed on 11 August 2022, and Mr Wang lodged the moneys with the ACT Revenue Office. Subsequently, the release of the bond became a matter of dispute between the parties, and the ACT Revenue Office referred the dispute to the ACAT on 18 October 2022.
These matters have an extended and somewhat tortuous history. Matter RT 745/2022 came before the tribunal on 28 September 2022. At that hearing, directions were made to both parties: to Mr Wang to file an amended application; and to Ms Kuzmanovic to file papers supporting her contention (evidently advanced at the hearing) that the tenancy agreement of 11 August 2022 had been entered into under duress. The matter returned to the tribunal on 4 November 2022 for preliminary conference. Neither Ms Kuzmanovic nor her father appeared and the tribunal, in accord with usual practice, proceeded to hear the matter and made orders in Mr Wang’s favour, accepting his uncontested evidence. On 12 December 2022, Ms Kuzmanovic lodged an application for interim orders under section 53 of the ACT Civil and Administrative Tribunal Act 2008, seeking that the orders of 4 November 2022 should be set aside. Those orders were duly set aside on 11 January 2023 and further directions were made to prepare for a substantive hearing, leading to the hearing of 8 March 2023. This decision deals with both the liability of the parties (RT 745/2022) and to whom the bond should be released (RT 860/2022).
In the period leading up to the hearing, the tribunal issued a subpoena at Ms Kuzmanovic’s request seeking various police reports. From the material returned under subpoena, Ms Kuzmanovic tendered two reports, one from 9 May 2022, identified as Exhibit R1,[10] and the other from 11 September 2022, identified as Exhibit R2.[11]
The issues
[10] Case 7105160
[11] Case 7213640
The issues to be decided in this matter vary depending on how two threshold issues are determined. First, who was lessor of the Macquarie premises at material times; and second, whether I accept Ms Kuzmanovic’s contention that the residential tenancy agreement apparently entered into by Mr Wang and Ms Kuzmanovic and her father on 11 August 2022 was the result of duress brought by Mr Wang. The rights and obligations of the parties may differ significantly depending on how those threshold questions are answered. Taking that into account, the issues to be decided are:
(a)who was lessor of the Macquarie premises at material times between February and September 2022;
(b)whether the tenancy agreement of 11 August 2022 was the result of duress;
(c)whether Ms Kuzmanovic and Mr Kuzmanovic owe payments in the nature of rent to Mr Wang;
(d)whether Ms Kuzmanovic and Mr Kuzmanovic owe money to Mr Wang for cleaning, rubbish removal and repairs;
(e)whether Ms Kuzmanovic should recover the “bond advances” that she says she paid to Mr Wang;
(f)whether Mr Wang should be obliged to make payments to Ms Kuzmanovic and Mr Kuzmanovic for non-economic loss and trespass;
(g)to whom the bond moneys for the premises should be released; and
(h)after carrying out any offsetting of these amounts, which of the parties owes the other, and how much is owed.
The legislative framework
The legislation governing residential tenancies in the ACT is the Residential Tenancies Act 1997 (the RTA).[12] Some early provisions in the RTA set out the basics of a residential tenancy agreement, defining a lessor as the person who grants the right of occupation under a residential tenancy agreement,[13] and defining a residential tenancy agreement as an agreement giving a tenant the right to occupy premises, as a home, for value, where the agreement is not an occupancy agreement.[14] A residential tenancy agreement may be express or implied, and may be written or oral or partly one and partly the other.[15] A residential tenancy agreement is taken to contain the standard terms set out in Schedule 1 to the Act.[16] The only consideration that a lessor may require or accept for the right to occupy premises is rent or a bond.[17]
[12] The RTA was amended in significant ways by the Residential Tenancies Legislation Amendment Act 2023; all the material events in the present matter were complete before that legislation came into effect, and the legislative provisions cited and quoted in this decision are those of the RTA as it stood in the period January – November 2022 (some amendments were made during that period by the Statute Law Amendment Act 2022, which came into effect on 24 August 2022, but none of those minor technical amendments are presently relevant).
[13] Residential Tenancies Act 1997 section 5
[14] Residential Tenancies Act 1997 section 6A(1)
[15] Residential Tenancies Act 1997 section 6A(2)
[16] Residential Tenancies Act 1997 section 8
[17] Residential Tenancies Act 1997 section 15
When a tenancy begins, the lessor is required to provide a condition report to the tenants, who may comment on it or sign it without comment; if no comment is made the tenant is taken to have agreed with the report.[18] If the lessor does not provide a condition report at the start of the tenancy, evidence given by the tenant about the condition of the premises at the start of the tenancy is evidence of the general state of the premises at that time.[19] At the end of a tenancy, the lessor must carry out a final inspection, with the tenant, and must complete and sign a report based on that inspection.[20] A lessor can deduct certain costs from the bond at the end of a tenancy, including unpaid rent and cleaning and repair costs.[21]
[18] Residential Tenancies Act 1997 section 29
[19] Residential Tenancies Act 1997 section 30
[20] Residential Tenancies Act 1997 section 30A
[21] Residential Tenancies Act 1997 section 31
Where a tenant leaves a fixed term tenancy before the term is complete, the lessor can seek compensation by applying to the ACAT. The amount of compensation depends on how much of the term is to run, and how long it takes to find a new tenant, and it can also include an amount for advertising for a new tenant and the like.[22]
[22] Residential Tenancies Act 1997 section 84
The standard terms in Schedule 1 to the RTA set out just over 100 terms that form the terms of the contract between lessor and tenant (barring some potential for amendment, not presently relevant). A lessor must not cause or permit interference with the reasonable peace, comfort and privacy of a tenant in use of the premises;[23] the tenant must take proper care of the premises, and in particular must leave the premises in substantially the same condition as at the start of the tenancy, fair wear and tear excepted.[24]
The evidence
[23] Schedule 1 to the Residential Tenancies Act 1997, standard term 52
[24] Schedule 1 to the Residential Tenancies Act 1997, standard term 64
Ms Kuzmanovic has provided material illustrating the long prehistory of the present disputes, which is useful both to set the disputes in context and also to understand to some degree why the parties have acted as they have. The crux of the dispute in RT 745/2022 is in the events of 11 August 2022, but those events come at the end of a long string of earlier incidents and actions.
The tenants’ initial tenancy
Mr Wang and Ms Bian were married for an extended period, and they divorced in 2017.[25] Before their divorce, they had invested in a number of residential properties, including the premises in the present matter and the house in Palmerston to which the respondents moved in September 2022 (the Palmerston property).[26] Mr Wang and Ms Bian, before their divorce, agreed on management arrangements for their properties with Ms Bian responsible for managing the Macquarie premises and Mr Wang the Palmerston property.[27] Following the divorce, the Federal Circuit and Family Court of Australia (the Family Court), as part of the settlement, made orders in October 2021 assigning the various properties to one or other of Mr Wang and Ms Bian. In this process, Mr Wang was assigned the Macquarie premises and Ms Bian the Palmerston property. It is common ground that the Macquarie premises, unlike apparently most or all of the other properties, were not in both names but only in that of Mr Wang – that is, Mr Wang was always, and remained up to the time of the hearing, the sole proprietor of the Macquarie premises.[28]
[25] Exhibit R4 at [7]
[26] Exhibit R4 at [3]
[27] Exhibit R4 at [6], [18]; transcript of proceedings, 8 March 2023, pages 17-18
[28] Exhibit R4 at [7]; transcript of proceedings, 8 March 2023, page 17
Ms Bian stated that the Macquarie premises were in a poor condition when first bought in 2003, and still, or again, in a poor condition in January 2022. Mr Wang, on the other hand, said that the sunroom, at least, was in a good condition when the house was bought.[29] In January 2022, Ms Bian advertised the property for rent on an online site. Ms Kuzmanovic responded to the advertisement and looked at the property in late January 2022.[30] Ms Bian said that a family violence order against her meant that she could not attend the premises herself, but she facilitated access by Ms Kuzmanovic. Ms Kuzmanovic said that the premises were “a mess”, but were being offered without a bond, and she agreed to move in. She spent the first 48 hours cleaning the premises and making them habitable. There was no condition report.[31] Ms Bian and Ms Kuzmanovic gave evidence that the sunroom, especially its floor, was in a poor state when Ms Kuzmanovic moved in, and the photographs taken by Ms Kuzmanovic support that view. Mr Wang, under extensive questioning by Ms Pham, was unable to make any persuasive statement to the contrary.
[29] Transcript of proceedings, 8 March 2023, page 28
[30] Exhibit R4 at [12]; Exhibit R3 at [3]-[4]
[31] Exhibit R3 at [5], [6] and [8]
No tenancy agreement was signed at this time, and Ms Kuzmanovic said that she could not recall how much rent she was paying initially.[32] What is clear, however, is that Ms Kuzmanovic moved in with her two-year old child and also with her fiancé.[33] At some point in March 2023, or possibly later, Mr Kuzmanovic joined his daughter and grandson in the premises, and Ms Kuzmanovic says that from this time they paid $1,020 per fortnight in rent to Ms Bian, inclusive of utilities.[34] Ms Bian says that the rent was $1,000 per fortnight at first, inclusive of utilities, rising to $1,020 once Mr Kuzmanovic joined his daughter. She agrees that she did not provide a condition report.[35]
[32] Exhibit R3 at [8]
[33] The fiancé was not identified in the course of the hearing nor was there any evidence about the date of his departure from the premises
[34] Exhibit R3 at [8]
[35] Exhibit R4 at [14]-[15]
On 17 April 2022, Ms Kuzmanovic entered into a tenancy agreement, apparently with Ms Bian. The document lists the lessor as “Sophie”, grants a six-month fixed term tenancy from 17 April to 17 October 2022 at $300 per week by bank deposit.[36] Ms Bian acknowledged that the tenancy agreement is for a rent amount different from that Ms Kuzmanovic actually paid; she stated that Ms Kuzmanovic paid $1,020 in cash every fortnight and never missed a payment until the events at the end of July/beginning of August.[37] Ms Bian said that she did not pass on the rent received to her former husband, because he did not pass on to her the rent he received on her behalf for the Palmerston property.[38]
The applicant makes contact with the tenants
[36] Respondent’s documents, page 24
[37] Exhibit R4 at [16]-[17]
[38] Exhibit R4 at [18]
On 9 May 2022, the applicant came to the Macquarie premises where he met the respondents, apparently for the first time.[39] His account is that he went there to assert his status as the proprietor of the premises and to convince the respondents that they needed to pay rent to him, not to Ms Bian.[40] He said that he showed them the Family Court order to persuade them that he was the legal owner of the property. Ms Kuzmanovic’s account is that Mr Wang arrived, yelled at her and her father, saying “I am the landlord, get out, I’ll kick you out to live on the street.” She rang the police who came and arrested Mr Wang.[41] In oral evidence, Ms Kuzmanovic said that Mr Wang simply walked into the house and said words to the effect of: “This is my house, get out. You should be paying rent to me. You're being used as a tool by my ex-wife. Don't be her tool. I'm not the bad guy. I don't know what she's told you, but it's all lies. You shouldn't be here. This is my house. You need to leave.”[42] In the material obtained under subpoena by the respondents, the police report Mr Wang as being “loud and verbal, stating the house is his and he can kick out whoever he wants”.[43] Mr Wang denied that he said the words attributed to him and also denied having been arrested. He acknowledged that the police made him accompany them but said that the police released him as soon as they arrived at the station, once he had shown that he was the proprietor of the premises.[44]
[39] Transcript of proceedings, 8 March 2023, page 19
[40] Transcript of proceedings, 8 March 2023, pages 19-20
[41] Exhibit R3 at [11]
[42] Transcript of proceedings, 8 March 2023, page 68
[43] Exhibit R1
[44] Transcript of proceedings, 8 March 2023, pages 22-23
It appears that Mr Wang also made a visit to the Macquarie premises on or around 28 July 2022.[45] Mr Wang agreed that he went to the premises unannounced, in the evening, and that he found only Mr Kuzmanovic present. He said that he showed him “the order made by ACAT”.[46] Ms Kuzmanovic said in her witness statement and in oral evidence that Mr Wang had visited the premises in July, and that her father had been alone in the house. She had bumped into someone leaving the house, who she thought had been Mr Wang, but it had been very dark, and she was unsure. She had once again called the police but by the time they had arrived, Mr Wang had gone.[47]
[45] Ms Pham referred to this visit as occurring on 18 July, but the evidence clearly points to 28 July
[46] Transcript of proceedings, 8 March 2023, pages 35-36
[47] Transcript of proceedings, 8 March 2023, pages 69-70; exhibit R3 at [12]
Included in the papers is a notice to vacate, or rather a paper headed “Notice to terminate the lease” dated 9 May 2022, stating that the notice is given under section 64 of the RTA, and that the tenants and any others living in the premises are required to vacate the premises by 4 July 2022, eight weeks after the date of the notice. The notice states that it has been issued in accordance with standard term 96(1)(d) of Schedule 1 to the RTA, and is signed by Mr Wang as “successor in title to lessor” of the premises.[48] On 10 July 2022, apparently on the basis of the “notice to terminate”, Mr Wang applied to the ACAT for a termination and possession order under section 64 (RT 528/2022). That application was heard on 27 July 2022 in the absence of the tenants, and a termination and possession order was made, effective on 28 July but suspended until 1 August.[49] Mr Wang’s visit to the Macquarie premises on 28 July 2022 was, it appears, intended to make the respondents aware of the orders the ACAT had made on 27 July 2022 granting the termination and possession order. The order included the usual provision that if the tenants did not vacate the premises the lessor could apply to the Registrar for a warrant for eviction. On 4 August, Mr Wang applied for a warrant, and one was issued.[50] Ms Kuzmanovic applied for interim orders setting aside the termination and possession order on 6 August 2022, and on 10 August 2022 matter RT 528/2022 came before the ACAT a second time, and the tribunal set the orders of 27 July aside.
[48] Respondent’s documents, page 25
[49] Respondent’s documents, pages 28-29
[50] Respondent’s documents, pages 30-31
It appears that at or just after the ACAT hearing on 10 August 2022, Ms Bian arranged with Ms Kuzmanovic that she could rent the Palmerston property. A tenancy agreement, completed on the same pro forma used for the April agreement for the Macquarie premises, grants Ms Kuzmanovic a twelve-month fixed term tenancy over the Palmerston property, starting on 30 August 2022, but with a handwritten annotation that the agreement “is under the condition of the vacancy of the premises”.[51] The date at the top of the agreement is given as 30 August 2022, although other evidence suggests that the agreement may in fact have been signed earlier.[52]
The events of 11 August 2022
[51] Respondent’s documents, page 32
[52] Transcript of proceedings, 8 March 2023, page 73
On 11 August, Mr Wang and Ms Kuzmanovic began exchanging emails and text messages, with both stating their willingness to enter into a new tenancy agreement. The exchange, occurring on 11 August between 3:02pm and 3:54pm, is as follows[53] (where “W” indicates a message from Mr Wang and “K” a message from Ms Kuzmanovic; bolding is in the original):
[53] Respondent’s documents, page 40; applicant’s documents, attachment F2
W: Just one more thing, if you move out in the next couple of days or weeks, just notify me and the Tribunal. I will withdraw my application against you and I will not seek compensation for loss of rent from you. Can you let me know what your intention is?
K: I am willing to pay you rent while I stay with my son here until you move your people out of Sophie’s house.
W: You know clearly you told a lot of lies under oath yesterday. Again I don’t want to argue with you any more. Palmerston has nothing to do with you. I told you clearly and even the Tribunal member told you that. It was between me and her. Is your choice to trust her, a big liar who laughs and giggles behind your back.
I offer you one more chance. Now you know clearly who you should pay rent to, in fact I told you a long time ago and showed you the title of the property. Just stop paying rent to her and start paying rent to me. I will withdraw my application. I know you probably think I am a bad guy. That’s fine. I will let you and your dad and your baby stay until you find another better place as long as you pay rent to me. Otherwise I will definitely get you out. That’s my best and final offer.W: No. Palmerston has nothing to do with you. I have told you and I will not repeat and don’t mention Palmerston any more. Even the tribunal member told you that. If you still want to be silly and stubborn, don’t talk to me any more.
K: I will pay rent to you this afternoon I can give you 500$ that is all we have on us for rent but you and I will have to sign something together so that there is proof I have been paying you rent I do apologize that I haven’t been paying rent to you I just needed to wait till the court date so I know who to trust and believe thank you Mr if you wish to come this afternoon when my father gets home with the money and the paperwork to sign I will pay rent to you
W: If you go over everything from the very beginning, you will see I have been doing the right thing and have been very kind and reasonable to you. Even in today’s email, I tried my best to give you another chance to help you albeit you were aggressive, rude and abusive to me yesterday.
Did you block my number? Can you unblock it? It is easy to talk on the phone especially to contact you in case of emergency. I need to go out now and will let you know when I will come. When will your dad come home?K: I apologise Mr Wang I do not mean to be rude I’m just under a lot of stress, my dad is home now
Mr Wang went to the Macquarie premises on the evening of 11 August 2022. According to Ms Kuzmanovic, this occurred late at night, and Mr Wang demanded that Ms Kuzmanovic and her father sign various documents, including a twelve-month fixed-term tenancy agreement for the Macquarie premises.[54] She said that he also pressured her to sign other documents, including a statement relating to the rent she had previously paid to Ms Bian for the Macquarie premises and a power of attorney made out to Mr Wang.
[54] Transcript of proceedings, 8 March 2023, pages 71-74; Exhibit R3 at [14]-[15]
The documentation provided by the applicant and by the respondent includes the papers signed that evening. There is a handwritten tenancy agreement, dated 11 August 2022 setting a term of twelve months from 15 August 2022 with Mr Wang as lessor and Ms Kuzmanovic and her father as tenants.[55] The rent is $510 per week plus $25 per week towards the bond until the bond amount of $2,040 is reached. The lease includes details of the bank account into which payment is to be made. The handwritten statement by Ms Kuzmanovic states that she had been paying $1,020 per fortnight in rent to Ms Bian since 17 April 2022; that Ms Bian collected this in cash each fortnight; and that she had deleted all the records of rent paid.[56]
[55] Respondent’s documents, page 34
[56] Respondent’s documents, page 39
On the next day there was a brief exchange of text messages between Mr Wang and Ms Kuzmanovic[57] as follows:
W: I sent another email to her Just now requesting her not to contact you. You don’t need to do anything. Just have a good day. I copied into you only for your information. I will deal everything with her and I know how to deal with her. You have gone through a lot with so much stress and it is all because she is being unreasonable and nasty and difficult and uses you as her tool. I am glad all over for you. Have a good day!
K: Awh Mr Wang thank you so much we have your back 100 percent I am so greatful Mr Wang thank you so so much
W: No worries. Have a good day
[57] Respondent’s documents, page 41
The papers also include a power of attorney, made out by Ms Kuzmanovic in favour of Mr Wang, on the pro forma used by the ACAT. The witnesses are Mr Kuzmanovic and a person whose name appears to be Lo Lam; the signatures of Ms Kuzmanovic and both witnesses are dated 13 August 2022.[58]
[58] Respondent’s documents, pages 35-38
Using the power of attorney, Mr Wang proceeded to bring an application by Ms Kuzmanovic as tenant against Ms Bian as lessor of the Macquarie premises. On 12 August 2022, he sent an email to Ms Bian[59] demanding that she fix taps in the premises that he stated were not working; attend to the sunroom, which he described as being “in an uninhabitable state”; and provide her bank statements to establish the level at which she had been receiving rent. Mr Wang demanded that all the matters be attended to by 4:00pm that day or else an application would be lodged with the ACAT. On 6 September, he signed an application[60] to the ACAT as Ms Kuzmanovic’s agent, dealing with the three issues raised in the email, seeking payment of a plumbing account for the taps, an order that Ms Bian attend to the sunroom, access to her bank statements or other record of rent receipts, and the filing fee for the application.[61] Ms Kuzmanovic said that once she discovered that the application had been made in her name she rang a number of places, including the ACAT, several times, to advise that she had not authorised an application against Ms Bian.[62] In her witness statement, Ms Kuzmanovic says that she provided that advice by email.[63] The respondent’s documents include an email from Ms Kuzmanovic, apparently to the Australian Federal Police, dated 12 September 2022, stating that she had not authorised Mr Wang to act on her behalf and certainly not to take action against Ms Bian.[64]
The Palmerston property
[59] Respondent’s documents, page 42
[60] RT 696/2022
[61] Respondent’s documents, pages 45-49
[62] Transcript of proceedings, 8 March 2023, page 74
[63] Exhibit R3 at [29]
[64] Respondent’s documents, page 50
As noted above, Ms Kuzmanovic made arrangements with Ms Bian, apparently in about August or early September 2022, to move into the Palmerston property. She said that in her first attempt to do so, on about 9 September 2022 (but more probably 11 September, judging from the police report), she found the house occupied by other tenants and the police present. Mr Wang was there contending that he had the right to have his tenants in the property. There was a confrontation and Ms Kuzmanovic returned to the Macquarie premises, but was able to move into the Palmerston property the next day.[65] She said that Mr Wang returned to the Palmerston property after she had moved in, entered the house without her consent, and had a further argument with her.[66] Ms Bian’s account of these events is that Ms Kuzmanovic telephoned her on a day around 9 September 2022, saying that she was at the Palmerston property and someone else was moving in. Ms Bian said that she rushed there and found Mr Wang there on the street and yelling. The police arrived, subsequently telling her that Mr Wang had rented out the property to other tenants. She later provided documentation to the police to prove her title to the property.[67] Mr Wang said that he attended the Palmerston property on the day in September when Ms Kuzmanovic tried to move in; that he had a valid lease with his tenants there; and that he called the police. He said he was surprised to find Ms Kuzmanovic there.[68] The police report is of events on 11 September, with the time given as 8:30pm. The report states that Ms Bian provided assurance that her tenants had permission to be on the property and were there lawfully. Police advised Mr Wang that this was a civil matter and that he should obtain legal advice. No further action was proposed.[69]
[65] Exhibit R3 at [22]-[24]
[66] Exhibit R3 at [25]
[67] Exhibit R4 at [21]-[23]
[68] Transcript of proceedings, 8 March 2023, pages 56-60
[69] Exhibit R2
On 12 September 2022, Mr Wang lodged another application[70] with the ACAT, this time under his own name, nominating Ms Kuzmanovic and Mr Kuzmanovic as respondents. He states in the application that his tenants in the Palmerston property had gone away and in their absence the respondents had unlawfully occupied the premises and changed the locks. He says that their lease over the property was fraudulent. His application seeks that they vacate the Palmerston property (returning to the Macquarie premises), leave behind all the other tenants’ property, and deliver him the keys.[71]
The end of the Macquarie tenancy
[70] RT 721/2022
[71] Respondent’s documents, pages 51-54
It appears that Ms Kuzmanovic and her father vacated the Macquarie premises on about 12 September or possibly a couple of days later. The police report of the confrontation at Exhibit R2 is dated 11 September 2022, and Ms Kuzmanovic said she moved into Palmerston on the next day, although it took two to three days to move all her effects out of the Macquarie premises. But Ms Kuzmanovic identifies the day on which the police were called to Palmerston as 9 September (although earlier she identifies the date as “on or around” 9 September).[72]
[72] Exhibit R3 at [23]-[26]
The tenants paid rent to Mr Wang after the agreement that they signed on 11 August 2022. In oral evidence, Ms Kuzmanovic said that she was reasonably sure that her father paid Mr Wang $500 in cash on the same day the lease was signed;[73] in her witness statement she said that she paid $550 in cash.[74] She then started paying rent to Mr Wang, paying $1,020 on 15 August and the same amount on 16 August 2022. On about 21 August, she said that Mr Wang demanded a further payment, and her father paid him “approximately $300”.[75] Ms Kuzmanovic’s bank records show transfers to Mr Wang of $1,020 on 16 August and a further $50 on 26 August 2022. In his oral evidence, Mr Wang said that he never accepted rent payments in cash, but always insisted on bank transfers. He received two rent payments after the tenancy agreement was signed on 11 August, the first of $1,070 in late August and the other of $1,170 at the beginning of September.[76] These amounts consisted of two payments of $1,020 plus $200 in payments towards the bond, because Ms Kuzmanovic could not afford the bond of $2,040 and had applied for a bond loan. Mr Wang required her to pay $50 each fortnight towards the bond while she waited for the loan to be approved. The loan was approved on 8 September 2022, and Ms Kuzmanovic paid it to Mr Wang. Mr Wang agreed at the hearing that the rent he had received met the respondents’ rental obligations up to 14 September 2022.[77]
[73] Transcript of proceedings, 8 March 2023, page 70
[74] Exhibit R3 at [16]
[75] Exhibit R3 at [19]-[21]
[76] Transcript of proceedings, 8 March 2023, page 49
[77] Transcript of proceedings, 8 March 2023, pages 50 and 52
On 21 September 2022, Mr Wang issued a notice to remedy to Mr and Ms Kuzmanovic, asserting that they had fallen behind in rent and had left a “huge mess” at the Macquarie premises.[78] No action having been taken on that notice, Mr Wang has included in matter RT 745/2022 a claim for cleaning and rubbish removal at the Macquarie premises. He said that there was rubbish in the sunroom, in particular, right up to the ceiling.[79] No ingoing condition report was done at the premises, nor an outgoing report, but photographic evidence is available showing the sunroom on 29 January, from photographs taken by Ms Kuzmanovic,[80] and of the sunroom at the time of Ms Kuzmanovic’s departure, taken, I gather, by Mr Wang.[81] The January photographs show the sunroom floor seriously damaged but the room otherwise free from clutter and debris; those from September 2022 show an accumulation of material in the sunroom. Ms Kuzmanovic explains this as having happened because she put into the sunroom all the material left behind in the premises from when she moved in and closed the door. The room was not usable anyway because of the broken floor.[82]
[78] Respondent’s documents, page 57
[79] Transcript of proceedings, 8 March 2023, page 30
[80] Respondent’s documents, page 20
[81] Applicant’s documents, attachments C1-C3
[82] Transcript of proceedings, 8 March 2023, page 67; respondent’s documents, pages 96-98
Mr Wang filed a quote for cleaning and rubbish removal for $4,245,[83] but acknowledged that the new tenants (who moved in on 5 November 2022) are doing the cleaning in return for a reduced rent.[84] It is not clear whether the rubbish has been removed, and if so by whom, or at what cost.
The arguments of the parties
[83] Respondent’s documents, page 56
[84] Transcript of proceedings, 8 March 2023, pages 55-56
Mr Wang argues that he, as lessor, entered into a tenancy agreement with the tenants on 11 August, with a twelve-month lease. They entered into that agreement willingly. This entitles him, under section 84 of the RTA, to rental payments after his tenants vacated the premises during the fixed term. He says they left the premises in a mess, and he is entitled to recover the cleaning and rubbish removal costs, as well as the cost of repairing the sliding door. The bond should be discharged to him to cover some part of what he is owed, and an order made for the tenants to pay him the remainder of his claim.
Ms Kuzmanovic says that she and her father entered the tenancy agreement under duress, and they seek that the contract be avoided. That means that Mr Wang would not be entitled to the benefits he might otherwise receive as lessor. As for the cleaning and rubbish removal, the premises were in no worse a state at the end of the tenancy than at the beginning. The cost of repairing the sliding door is inflated, but after some reduced amount for the repairs to the door has been deducted, the remainder of the bond should be discharged to the tenants. And Mr Wang should compensate the tenants for denying them the peace, comfort and security they were entitled to at the Macquarie premises and for trespassing at the Palmerston property.
Consideration
Some preliminary issues
Before turning to the issues in dispute, as identified earlier, it may be helpful to consider some preliminary matters. The first of these relates to the absence of Mr Kuzmanovic from the proceedings. The tenancy agreement entered into with Ms Bian in April 2022 was with Ms Kuzmanovic only, which means that Ms Kuzmanovic was head tenant, with her father a sub-tenant. But the agreement apparently entered into with Mr Wang on 11 August names both father and daughter as tenants, and both signatures are on the agreement. Section 8 of the RTA calls up all the standard terms in Schedule 1 to the RTA and makes them implied terms in each tenancy agreement where they are not otherwise so specified. Standard term 100 states that unless the tenancy agreement states otherwise, two or more people in a tenancy are co-tenants. In the present matter, it means that Ms Kuzmanovic and her father have the same rights and obligations under the tenancy agreement of 11 August 2022, and unless there is some reason for distinguishing, any orders that I might make will apply to each of them equally (the above remarks assume that the agreement is valid – a matter I return to below).
As set out above, Mr Kuzmanovic provided a note on the day of the hearing in which he gave permission for his daughter to speak on his behalf. The note was signed (and the signature appears to align with that on other documents) but not dated, and it was not witnessed. This is not the usual way in which powers of attorney are granted so as to allow one person to represent another at the ACAT. Furthermore, Ms Kuzmanovic did not speak on her own behalf, but was represented by Ms Pham, which made it seem odd that she might speak for her father. It was open to me to decide that I was hearing the matter in Mr Kuzmanovic’s absence, but I resolved to treat Mr Kuzmanovic’s note as adequate for the purposes of having him represented. In the first place, it was apparent that in all the matters that have come to the ACAT with Mr Kuzmanovic’s name on them as a party, he has been absent from each and every hearing; and in the event, Ms Kuzmanovic put no matters to me specifically on her father’s behalf. It seemed to me that the case I was hearing on behalf of Ms Kuzmanovic effectively spoke equally for her father’s interests, despite Ms Pham not having been engaged by Mr Kuzmanovic.
That said, Ms Kuzmanovic’s case is clearly weakened by her father’s silence. He might have been able to corroborate her evidence on matters such as the cash rent she claimed to have paid Mr Wang; or on the visit to the Macquarie premises by Mr Wang on 28 July 2022, on which Ms Kuzmanovic’s evidence is very incomplete. It might also be open to me to draw an inference of the kind considered in Jones v Dunkel,[85] in which the High Court approved the drawing of an adverse inference by a court where a witness whose evidence might have been expected to help a party is not called. Thus, Mr Kuzmanovic’s evidence, if he had attended and given evidence, might have been expected to help him and his daughter; so, is it reasonable to draw the inference that his absence means his evidence would not in fact have helped her? In this instance, I do not think that would be a reasonable conclusion to draw. It looks very much as if Mr Kuzmanovic’s absence reflects a general aversion to tribunals, or perhaps the public exposure that goes with tribunals, or something of a similar kind, and I do not think I can reasonably draw an inference of the Jones v Dunkel kind, in all the circumstances.
[85] [1959] HCA 8
Some of the centrally important events in this matter are the subject of contested evidence, especially the circumstances of 11 August 2022. For that reason, it may be useful to comment on the general quality of the evidence that came from Mr Wang and Ms Kuzmanovic. Mr Wang made comment to me in the hearing about his consistency and truthfulness, but it is clear to me that, first, he is eager to put the best possible interpretation on his evidence – a characteristic found in many witnesses, but especially pronounced in Mr Wang. As an example, he refused to accept that he was arrested on the evening of 9 May 2022, when the police were called to the Macquarie premises; but the police report clearly identifies him as having been arrested at the scene, even if he was later “unarrested” once the police had established the facts of the matter at the station. A second point about Mr Wang is his decided evasiveness when pressed on some matters, for example when questioned about his knowledge of the state of the Macquarie premises in early 2022.[86]
[86] Transcript of proceedings, 8 March 2023, pages 24-31
As for Ms Kuzmanovic, she was plainly uncertain from time to time about details, especially details such as dates and amounts, but my observation is that her evidence tended to lead in the same direction despite the variation in matters of detail. An example is the approximate date at which her father joined her in the Macquarie premises: in her witness statement it is March 2022,[87] but in oral evidence she suggested a later date, after April 2022.[88] Similarly Ms Kuzmanovic said in her witness statement that she paid Mr Wang $550 in cash on 11 August 2022, when the tenancy agreement was signed;[89] in oral evidence the amount was $500.[90] Despite differences of this kind, however, it appears to me that Ms Kuzmanovic was consistent in her outline of the essentials of the relevant events – she was, for example, consistent in contending from the outset that she entered into the tenancy of 11 August 2022 with Mr Wang under duress. But I cannot think that her evidence is so consistent that I should take all that she said as truth. To take one example, Ms Kuzmanovic insisted that a cash payment was made to Mr Wang on 11 August; but a text message by Mr Wang on, it appears, 1 September 2022, part of a protracted exchange of messages about the rent, includes the passage, “This is only the second time you pay rent and you can’t pay it. You said you would pay me $500 on Thursday 11 Aug. I was kind enough to let you start paying rent on Mon 15 Aug …”[91] This is a contemporaneous message, and it seems to imply that although $500 was promised on 11 August, it was not paid, and the first payment of rent was made a few days later. In turn, that calls into doubt Ms Kuzmanovic’s insistence that a cash payment was made the night the tenancy agreement was signed. But if that agreement was signed under duress, it would not be impossible that the stresses of the evening could lead to some imperfection in the memories of those involved.
Who was the lessor of the Macquarie premises at material times? Was the tenancy agreement of 11 August 2022 signed under duress?
[87] Exhibit R3 at [8]
[88] Transcript of proceedings, 8 March 2023, page 68
[89] Exhibit R3 at [16]
[90] Transcript of proceedings, 8 March 2023, pages 74-75
[91] Respondent’s documents, page 73
It is usual for the lessor and proprietor of premises to be the same, but that is not a requirement of the RTA. All the RTA says is that a lessor is someone who grants the right to occupy premises under a tenancy agreement.[92] On the evidence before me, Ms Bian granted that right to Ms Kuzmanovic, at first orally, with the essentials of the tenancy agreement apparently implied, and then in the brief written agreement signed on 17 April 2022. The evidence suggests that she did so as the agent of Mr Wang, the proprietor. Clearly, Mr Wang wished to assert his rights as proprietor to become the lessor, but it was with Ms Bian that Ms Kuzmanovic entered into an agreement, and the agreement was for a fixed term of six months, running to 17 October 2022. Subsequently, on 11 August 2022, Ms Kuzmanovic and her father signed a new tenancy agreement with Mr Wang. What then became of the previous agreement with Ms Bian and the rights and obligations of the parties under that contract?
[92] Residential Tenancies Act 1997 section 5
There is more than one possible answer to the above question. One possibility is that the initial tenancy with Ms Bian came to an end and a new tenancy with Mr Wang took its place. A second option is that the tenancy that appeared to have been entered into between the tenants and Mr Wang on 11 August was void, leaving the initial tenancy with Ms Bian in place. And a third option is that the sequence of events should be interpreted as a single tenancy throughout, with a transition from Ms Bian as lessor to Mr Wang as lessor (which might occur, perhaps, by some process such as assignment of the contract by Ms Bian to Mr Wang).
What is abundantly clear from the evidence is that Mr Wang and Ms Bian were fighting a battle over their previously shared property and using their tenants as proxies in that battle. A decision of the Family Court dated 8 October 2021 allocated a number of properties to either Ms Bian or Mr Wang, with the Macquarie premises going to Mr Wang and the Palmerston property allocated to Ms Bian. It is not entirely clear, but the evidence suggests that the court’s order took effect on 9 May 2022, which is when Mr Wang appeared at the Macquarie premises and tried to assert his rights as proprietor. But the tenants had a contractual obligation to pay rent to Ms Bian until 17 October 2022. How the rent was to be paid and to whom was a matter between Mr Wang and Ms Bian, in which the tenants should have been able to remain completely uninvolved. Instead, Mr Wang appeared unannounced at the premises and attempted to have the rent paid to himself, in breach of the existing tenancy agreement. He made another attempt on 28 July, having given notice to the tenants under section 64 of the RTA (dealing with a successor in title to premises), and having obtained an order for termination and possession from this Tribunal, which was later set aside. Finally, after that order was set aside on 10 August 2022, he arrived on 11 August and secured the tenants’ signatures on a new tenancy agreement as well as on various other documents.
Of course, it should have been possible for Mr Wang to establish himself as lessor by ending his agency relationship with Ms Bian. No explanation was offered as to why that did not occur, and I am not aware of any evidence throwing light on the question. It may be that this is an example of a relationship breakdown leading to a previously co-operative arrangement falling apart. In those circumstances, it may happen that the previous arrangement falls short of being an enforceable contract, leaving the parties in a position where they cannot easily enforce what they regard as their rights under the previous arrangement.[93] But why things proceeded as they did is not really at issue; what is plain is that rather than pursue some resolution with his ex-wife, Mr Wang sought to insert himself unilaterally into the tenancy arrangement, displacing Ms Bian. It may be that Ms Bian was playing the same game at the Palmerston property, but that is not at issue in these proceedings; it is Mr Wang who is the applicant in these matters.
[93] There is a long list of cases dealing with such matters; see for example Tomanovic v Argyle HQ Pty Ltd [2010] NSWSC 152; Secola v McCann [2011] WASC 342
If the tenancy agreement of 11 August is to stand, the agreement with Ms Bian must have terminated. Section 36 sets out a limited number of ways in which a tenancy agreement may be brought to an end; these are stipulated to be the only ways in which such an agreement can terminate. Fourteen different paths to termination are identified, but only a few are presently relevant possibilities. Some of them[94] require the ACAT to have made an order terminating the agreement; Mr Wang attempted to obtain such an order, and briefly succeeded, but the order was set aside. Other potentially relevant ways include paragraphs 36(1)(b), (f), (g), (h) and (j). These read as follows:
[94] Paragraphs 36(1)(d) and (e)
…
(b) if a tenant notifies the lessor in the form approved under section 133 (Approved forms—Minister) for a termination notice, and vacates the premises in accordance with the notice;…
(f) if the tenant abandons the premises that are the subject of the agreement;
(g) if a person takes action in accordance with section 64;
(h) if the tenant and lessor agree in writing to terminate the agreement and the tenant vacates the premises in accordance with the agreement to terminate;…
(j) if—
(i) a party to the agreement repudiates the agreement; and
(ii) the other party accepts the repudiation; and
(iii) the tenant vacates the premises;
…
Of these, it seems to me that the facts of this matter do not align with paragraphs (f) and (j). If the premises were abandoned, they were only abandoned when the tenants left the Macquarie premises on 11 or 12 September, meaning that Mr Wang’s purported tenancy cannot have displaced Ms Bian’s over the previous month. And even if the parties’ statements and behaviour from time to time are interpreted as attempts at repudiation, it could not be said in any instance that the other party accepted that repudiation; the parties have been opposed to each other at every turn. Mr Wang attempted to end the tenancy under section 64, but the order he obtained was set aside, because the tribunal was not satisfied that the notice to the tenants had been properly served.
Paragraph (b) refers to the use of an approved form; no forms have ever been approved under section 133 and the paragraph has been usually understood to refer to the various provisions that allow a tenant to give notice under the RTA of the intent to terminate a tenancy (and the recent amendments to the RTA give effect to that interpretation). Neither that paragraph, however, nor the remaining paragraph (h) fit the circumstances of Mr Wang’s displacement of his ex-wife as lessor on 11 August 2022.
It is plainly relevant at this time to consider the respondents’ claim that the tenants entered the tenancy agreement on 11 August 2022 under duress by Mr Wang. The law of contract recognises that duress involves a significant interference in the freedom of parties to enter freely into a bargain. A contract entered into under duress is voidable at the discretion of the party subject to duress. Ms Kuzmanovic has applied for the contract to be avoided on that basis. It is important to recognise here that all contracts are a bargain struck between the parties, and that each party to a contract may feel that the bargain went beyond what they wished to offer. A relevant example is that every person seeking rental accommodation is potentially at risk of homelessness if they cannot agree on critical terms with a prospective lessor. But a contract completed under duress is distinguished in two ways: by having been entered into under improper pressure to do so; and by the aggrieved party’s consent being consequently impaired.
In Thorne v Kennedy[95] (Thorne), the plurality of the High Court noted the closeness, indeed the overlap, among the doctrines of duress, undue influence, and unconscionable dealing, and commented on the factors that distinguish each of those doctrines from the others. Thus, duress involves a person’s consent being impaired by some form of compulsion or pressure; undue influence occurs where the aggrieved person’s will was not free but was substantiated to that of another; and unconscionable dealing involves the aggrieved person suffering a “special disadvantage” which prevents the person from exercising free judgment, and the other party takes unconscientious advantage of that special disadvantage.
[95] [2017] HCA 49
Each of the above doctrines has been the subject of elaboration in the courts. In Crescendo Management Pty Ltd v Westpac Banking Corp,[96] McHugh J said that it was not necessary that the person subjected to duress entered into the contract only because of the pressure brought to bear; but that improper pressure must be at least a factor in the decision. Australian & New Zealand Banking Group v Karam[97] is authority for the proposition that the pressure that is brought to bear to compel the contract to be entered into must be unlawful. This appears to be the accepted position in Australia, although not in the UK or US. In Thorne, Gordon J seemed to contemplate that when the opportunity presented, the High Court might be willing to consider relaxing that rule.
[96] (1986) NSWLR 40 at 46
[97] [2005] NSWCA 344
Turning then to the present matter, I note that Ms Kuzmanovic once or twice referred to mental health conditions that she said she suffered from. When she sent a note to the Australian Federal Police stating that she had no intention of taking action against Ms Bian, and that she had signed various papers under duress,[98] Ms Kuzmanovic said that she suffered from “multiple intellectual disabilities and mental health issues”. Similarly, during the hearing, Ms Kuzmanovic said that she suffered from “complex PTSD” and “all sorts of crazy mental illnesses”.[99] No medical evidence has been tendered in support of those assertions, and the evidence is far too thin for me to conclude that Ms Kuzmanovic suffers from the kind of special disadvantage needed for unconscionable dealing along the lines explained in Commercial Bank of Australia Ltd v Amadio.[100]
[98] Respondent’s documents, page 50
[99] Transcript of proceedings, 8 March 2023, page 70
[100] [1983] HCA 14
It might be possible to set out a case that Ms Kuzmanovic’s will was subservient to that of Mr Wang on 11 August 2022, so as to support a finding of undue influence. But most of the evidence leading up to that date suggests that Ms Kuzmanovic was resistant to Mr Wang’s pressure. The evidence is much more aligned with the indicia of duress. Relevant evidence includes:
(a)Mr Wang’s marked and persistent determination to become the lessor for the Macquarie premises, leading to almost constant pressure on Ms Kuzmanovic. In succession, there are the visit to the premises on 9 May 2022, the termination notice of the same date under section 64 of the RTA, the application under that section to the ACAT of 10 July 2022, the termination and possession order of 27 July, the visit to the premises on 28 July, the warrant of eviction applied for on 4 August 2022 and the events of 11 August 2022, after the termination and possession order was set aside. All of these were plainly aimed at the same end – displacing Ms Bian as lessor of the Macquarie premises; and all of them put pressure on Ms Kuzmanovic.
(b)That determination was accompanied by an apparently equal determination that Ms Kuzmanovic should not take up the tenancy at the Palmerston property. This is evident in Mr Wang’s email response to Ms Kuzmanovic on the afternoon of 11 August 2022[101] and in his text messages to her of 9 to 11 September 2022.[102] Once again, this determination was manifested in pressure on Ms Kuzmanovic.
(c)Mr Wang showed himself as capable of being physically overbearing. The police report of 9 May 2022 reports him as “yelling and standing over the tenants, stating that he was legally allowed to kick them out of the location”. Mr Wang played this down, but I have no reason to treat the police report as anything but neutral and reliable evidence. The evidence about events on 28 July 2022 is very limited, as Ms Kuzmanovic arrived home as Mr Wang, or perhaps some other visitor, was leaving. Her account of her father’s story is hearsay and of little value as evidence. But in his own evidence at the hearing, Mr Wang acknowledged that he had visited the premises in July without warning or consent and had spoken to Mr Kuzmanovic. Ms Kuzmanovic said that Mr Wang yelled at her and her father on 11 September 2022 at the Palmerston property, but there is no evidence in support in the police report (Mr Wang was the complainant on that occasion). Section 97 of the Evidence Act 2011 (the Evidence Act) limits the use of evidence going to the tendency of a person to behave in particular ways. I am not bound by the rules of evidence, but the weight given to this point needs to take into account the potential for tendency evidence to be prejudicial. Section 97 of the Evidence Act provides that evidence of a person’s tendency to behave in a particular way may only be admitted if the court thinks that the evidence, alone or with other evidence, has significant probative value. In this instance, the evidence of Mr Wang’s behaviour on 9 May 2022, and the limited evidence of his visit to the Macquarie premises on 28 July 2022, align with other evidence to support Ms Kuzmanovic’s account of what occurred on 11 August. Accordingly, I am assigning reasonable weight to the evidence that shows Mr Wang as having a tendency to yell at and be overbearing with his tenants.
(d)The email and text message exchanges between Mr Wang and Ms Kuzmanovic, especially those on 11 August 2022, illustrate the strength of Mr Wang’s determination to resolve his differences with Ms Bian in ways that would be to his advantage; and they once again show how it was Ms Kuzmanovic who was on the receiving end of his attentions (in oral evidence she spoke of the endless stream of emails on that day).[103] The line adopted by Mr Wang on that day was a substantial shift from that he had followed up to that point: previously he had attempted to terminate the existing tenancy and evict the respondents, but on 11 August 2022 he offered Ms Kuzmanovic and her father the option of staying in the property under a new tenancy agreement. It is perhaps not surprising that Ms Kuzmanovic seized the opportunity with both hands – but it also points to the possibility that she was not taking the decision in a free and considered way.
(e)The other documents signed on or about 11 August 2022, namely the power of attorney and the handwritten statement by Ms Kuzmanovic suggest very forcibly that Ms Kuzmanovic, and equally her father, were not able to withstand the pressure that Mr Wang brought to bear on them. These are not documents that gave any advantage to the respondents, unlike the tenancy agreement, which arguably had the advantage of keeping them in accommodation until the Palmerston property became available to them. That Ms Kuzmanovic and her father signed the power of attorney, and that Ms Kuzmanovic wrote and signed her handwritten statement, both of them documents that she showed little understanding of at any stage, suggest very strongly that Ms Kuzmanovic’s freedom in decision-making was seriously impaired.
(f)The evidence of Ms Kuzmanovic at the hearing was that on 11 August 2022 Mr Wang arrived at night; stood throughout the visit despite invitations to sit; insisted that she and her father sign the documents he put before them; said that if she did not she would no longer have a roof over her head; and dictated her handwritten statement to her; and that she had little understanding of the documents that she signed.
[101] Respondent’s documents, page 40
[102] Respondent’s documents, pages 78-83
[103] Transcript of proceedings, 8 March 2023, page 70
This evidence is of course directly contested by Mr Wang. Against it is the tenor of Ms Kuzmanovic’s emails and text messages to Mr Wang on 11 and 12 August 2022, which is accepting of what Mr Wang was putting to her; and Mr Wang’s own evidence, in which he depicted Ms Kuzmanovic as the beneficiary of his generosity, and a person who welcomed the opportunity of remaining at the Macquarie premises.
On the one hand, it looks as if Ms Kuzmanovic and her father were forced into signing the tenancy agreement, for fear of having nowhere to live. On the other hand, Ms Kuzmanovic was in contact with Ms Bian: She was aware that the Palmerston property would be made available to her father and herself, and that the Macquarie premises might therefore serve as a roof over their heads until they could move to Palmerston. But these two options are not mutually exclusive; it is entirely possible that the tenants felt compelled to sign the papers put before them but did so somewhat more willingly because they knew that another tenancy option would shortly open up. The case law stated earlier notes that the tenants’ decision to sign may have been affected by duress even if the tenancy offered by Mr Wang had some attractions for them.
It is clearly possible that Ms Kuzmanovic, having resisted Mr Wang’s attempts to insert himself as lessor for an extended period, simply decided to play along from 11 August, whether on her own initiative or at the suggestion of Ms Bian. The abrupt change in her tone in the email exchange of 11 August 2022 might suggest this, or it may simply reflect the shift in Mr Wang’s approach. The text message of 12 August from Ms Kuzmanovic seems to me disingenuous: “Awh Mr Wang thank you so much we have your back 100 percent I am so greatful Mr Wang thank you so so much”. It is difficult to read that message as sincere; it seems unduly effusive and suggests that Ms Kuzmanovic might have been simply avoiding conflict until the move to Palmerston could take place. But no other evidence in support of such a thesis has been put to me, nor has Mr Wang pressed a point along those lines. The evidence does not allow me to conclude, on the balance of probabilities, that Ms Kuzmanovic was practising a deception of that kind.
It is important to recall here that the exchange of 11 August 2022 – and for that matter all the previous exchanges with Mr Wang, including those of 9 May and 28 July 2022 – took place in the context of the existing tenancy agreement of 17 April 2022 with Ms Bian. At various times, Mr Wang suggested that agreement was “fraudulent” or “forged”. It appears that in these remarks he was focused on the rental amount in the agreement, which is set at $300 per week. Both Ms Bian and Ms Kuzmanovic have acknowledged that the amount the latter actually paid under the agreement was $510 per week. But if there is a fraud here it is by Ms Bian on Mr Wang; the agreement, however irregular, brief and informal, meets the definition of a rental tenancy agreement in the RTA. It is a grant of the right to occupy the premises, as a home, for value. The evidence points to Ms Bian having granted the tenancy as Mr Wang’s agent. Mr Wang has put no suggestion to me that Ms Bian had no right to make the grant, nor that the agreement was not entered into freely on both sides. And the tenancy agreement, brief as it is, includes the essential terms needed for a valid tenancy agreement, provided one accepts the identification of “Sophie” as sufficient to establish Ms Bian as lessor.[104] It follows that Mr Wang’s efforts to secure the position of lessor were designed to persuade or compel the respondents to abandon their contractual responsibilities under their existing agreement.
[104] See Anforth et al, Residential Tenancies: Law and Practice in NSW (Federation Press, 7th edition, 2022) at [2.13.3]
Taking into account all the above evidence, I am persuaded that it is more likely than not that the tenants signed the 11 August tenancy agreement under duress. Mr Wang’s actions were unlawful, in that he was exerting pressure on the tenants to abandon their contractual obligations; and he had no right to threaten the consequences that he referred to. On the basis of the pattern established in the three months leading up to the events of 11 August 2022, I believe that it is more likely than not that Mr Wang made threats to the respondents that put them in real fear of the consequences he identified. And it is not disqualifying that the respondents may have had other reasons for entering into the contract. The tenancy agreement signed on 11 August by Mr Wang and the respondents is void.
It follows that the payments made to Mr Wang in August 2022 must be repaid. These amounted to $2,240, consisting of $2,040 in rent and $200 in advance bond payments. The rent component is logically owed to Ms Bian as the true lessor of the Macquarie premises; but she is not a party, and I do not propose to make an order in her favour for this amount. That is a matter that Ms Kuzmanovic and Ms Bian can sort out between themselves.
Returning to the question that I originally posed, it is now clear that Ms Bian was the lessor of the Macquarie premises throughout the period in question. The tenancy agreement came to an end on 12 September 2022. The tenancy agreement for the Palmerston property became effective on that date, and in my view, it is clearly implied that the agreement for the Macquarie property ended by mutual agreement between lessor and tenant on that date, under section 36(1)(h) of the RTA.
Claims by the applicant for rent, cleaning, repairs and rubbish removal
As Mr Wang did not have a valid rental tenancy agreement with Ms Kuzmanovic and her father, he cannot claim rent from them either for the period when they were occupying the property, or, for that matter for after they left it. Section 84 of the RTA (and standard term 84) allows a lessor to make a claim for lost rent where a tenant leaves a fixed-term tenancy before the end of the fixed term, and this was the basis for Mr Wang’s claim. But the claim allowed by section 84 must be by the lessor, and since Mr Wang was not the lessor at any stage, and his twelve‑month fixed-term tenancy from 11 August 2022 was not valid, his claim must fail.
In a similar way, Mr Wang’s claim for cleaning and rubbish removal cannot succeed as he was not the lessor for the Macquarie premises. Standard term 63 requires the tenant to look after premises during a tenancy, and standard term 64 requires the tenant to leave premises at the end of a tenancy in a condition similar to that at the start of the tenancy, fair wear and tear excepted. But these are the terms of the agreement between lessor and tenant, that is, they are obligations of the tenant vis-à-vis the lessor; the doctrine of privity of contract excludes the proprietor, if the proprietor is not the lessor, from the rights and obligations established by the tenancy agreement. Of course, a proprietor may be vicariously liable for the actions of their agent, where those actions carry the proprietor’s authority; but the actions the subject of the present matter were not taken by the agent, but by the proprietor himself.
I might add that the claim for cleaning and rubbish removal is not likely to have succeeded even if Mr Wang had been the lessor. No ingoing condition report was provided, not at the start of the tenancy with Ms Bian, nor at the start of Mr Wang’s purported tenancy. No outgoing condition report was prepared with Ms Kuzmanovic’s participation at the time of her departure from the Macquarie premises. There are some photographs of the premises taken by Ms Kuzmanovic, apparently on 29 January 2022, and some by Mr Wang, taken in September 2022. The evidence seems to show that the rubbish in the sunroom, which has been or is to be removed at Mr Wang’s expense, was nothing more than the collected rubbish and abandoned items from elsewhere on the premises, rubbish that is readily visible on Ms Kuzmanovic’s photographs. It would be difficult to persuade me that the premises were in a worse condition at Ms Kuzmanovic’s departure than at her arrival.
Mr Wang has claimed for damage to a cavity sliding door. The respondents have accepted responsibility for the damage (it was done apparently by Ms Kuzmanovic’s domestic partner at an early stage of the tenancy). Mr Wang obtained a quote for $660 for replacing the door. There was some discussion at the hearing that the figure was inflated, that repairs could be done more cheaply, and that Mr Wang failed to mitigate his loss by carrying out an outgoing inspection, which might have allowed Ms Kuzmanovic to find a cheaper solution. In my view, the respondents, having accepted responsibility, had the obligation to find a cheaper option if one was available. The quote is less than compelling as an indication of the likely repair or replacement cost, but it is the only evidence I have, and it does not seem to me to be orders of magnitude too high. Mr Wang is entitled to $660 for repair or replacement of the cavity sliding door.
The counterclaim – loss of peace, comfort or privacy, and trespass
The counterclaim by Ms Kuzmanovic is for breach of standard term 52, which states that a lessor “must not cause or permit any interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises”; and for trespass at the Palmerston property. Ms Kuzmanovic is seeking $5,000 in non-economic loss for breach of term 52 and $1,000 for the trespass claim. At the hearing, I pointed out to Ms Pham that the trespass claim presented the difficulty that it was not for a matter that arose under the application, which was made under the RTA, that it was not in any case a residential tenancy dispute, and that it related to different premises. It seemed rather to be a matter that might be brought under the civil disputes jurisdiction of the tribunal. Ms Pham did not press that aspect of the counterclaim.
In respect of the breach of standard term 52, Ms Pham pointed to the behaviour of Mr Wang on 9 May 2022 and on 11 August 2022. She did not press the visit of 28 July 2022 – which Mr Wang admitted occurred and occurred without notice – but she did point to the application against Ms Bian brought in Ms Kuzmanovic’s name under the power of attorney dated 13 August 2022. A breach of standard term 52, however, requires that the lessor “cause or permit” the interference in question. Ms Bian was the lessor of the Macquarie premises at all material times, and I am aware of no evidence that Ms Bian caused or permitted the interference that is the subject of the claim; certainly, none has been put to me. For that reason, the claim must fail. Even if the tenancy agreement signed on 11 August had been valid, I think the respondents’ claim would have confronted the same difficulties, as Mr Wang would not have become lessor on that scenario until after any events that might be judged breaches of standard term 52. It may be that the respondents have a cause of action available under other provisions of the ACAT Act; but they have no claim under the RTA.
To whom should the bond be discharged?
Ms Kuzmanovic applied for a loan to pay her bond of $2,040 in the context of the purported tenancy agreement of 11 August. That loan was approved, and Ms Kuzmanovic’s bond was lodged with ACT Rental Bonds. The bond was discharged to Mr Wang on 4 November 2022 by order of the Tribunal, but that order was later set aside, and Mr Wang was ordered to re-lodge the bond with ACT Rental Bonds. At the hearing for the present matter, he acknowledged that he had not done so, stating that this was because various email and other details provided by the tenants had been in error. He accepted that he was still holding the funds.
It follows from the conclusions arrived at above that Mr Wang is to repay the bond moneys to the respondents.
Conclusion
In the matter of RT/745/2022
The Tribunal orders that:
(a)The applicant is to pay the respondents the sun of $1,580, consisting of:
(i) $2,040 paid as rent under the invalid tenancy agreement; and
(ii) $200 paid as advances on the bond for the premises under the invalid tenancy agreement;
(iii) less $660 owed by the respondent/tenants to the applicant/lessor for repair to or replacement of the damaged cavity sliding door.
(b)The counterclaim made by the respondents is dismissed.
(c)The purported tenancy between the applicant and the respondents dated 11 August 2022 is declared void for duress.
In the matter of RT 860/2022
The Tribunal orders that:
(a)The applicant is to pay to the respondents the sum of $2,040 held by him as bond paid under the invalid tenancy agreement.
………………………………..
Senior Member M Hyman
Date(s) of hearing: | 8 March 2023 |
| Applicant: | In person |
| Respondent: | Ms T Pham, Legal Aid ACT |
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