Young & Anor v Chief Executive Officer (Housing)

The parties to this proceeding before the High Court of Australia were the applicants, Young & Anor, and the respondent, Chief Executive Officer (Housing). The dispute concerned the extent to which general contract law principles, specifically those relating to remoteness of damage, apply to a statutory power to award compensation for breach of a residential tenancy agreement under section 122 of the Residential Tenancies Act. The applicants sought special leave to appeal a decision of the Court of Appeal, which had held that the statutory compensation power was limited by concepts of remoteness and foreseeability, thereby precluding compensation for disappointment or distress arising from a breach of the tenancy agreement.

The legal issues before the High Court were twofold. Firstly, whether the statutory power to award compensation under section 122 of the Residential Tenancies Act was, on its own terms or by reference to principles from cases like *Baltic Shipping Co v Dillon*, qualified by general contract law principles of remoteness. The applicants argued that Parliament had intended a causation touchstone, allowing compensation for loss or damage caused by the breach, including for disappointment or distress, without the importation of remoteness limitations. Secondly, the applicants contended that even if general contract law principles applied, residential tenancy agreements should be considered contracts for peace of mind, freedom from molestation, or anxiety, thus falling within the second limb of principles established in *Baltic Shipping*, particularly given the vulnerable circumstances of the tenant.

The applicants' primary submission was that section 122 of the Residential Tenancies Act operated as a code, defining the limits of compensation without the need for additional limitations imposed by courts. They argued that Parliament's choice of words did not embrace remoteness principles and that the statutory power was sufficiently clear in its causation requirement. While acknowledging that remoteness might be relevant in the quantification of damages, they asserted that the facts of this case, involving a fundamental breach of a statutory obligation to provide reasonable security over a prolonged period to a vulnerable tenant, were not remote. Furthermore, they argued that residential tenancy agreements, being everyday contracts affecting a significant portion of the population, should be treated as contracts for enjoyment and freedom from anxiety, citing overseas authorities such as *Farley v Skinner* and *Chiodi* in support, and highlighting a divergence of opinion among Australian courts on this issue. The respondent, conversely, argued that section 122 incorporated common law principles, including remoteness, as it "piggybacked" on contract law concepts, and that the provision was not unique to the Northern Territory in a way that would warrant the High Court's intervention.

The Court ultimately granted special leave to appeal. The applicants' appeal was to proceed on the basis that the Court of Appeal erred in importing principles of remoteness and foreseeability into section 122 of the Residential Tenancies Act, and in failing to recognise a residential tenancy agreement as a contract for enjoyment or freedom from molestation, thereby precluding compensation for distress and disappointment. The Court also noted that certain procedural matters regarding consent orders had been resolved.