ZHOU & TAYLOR (Residential Tenancies) - [2011] ACAT 15

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

ZHOU & TAYLOR (Residential Tenancies) [2011] ACAT 15

RT 618 of 2010
Catchwords: RESIDENTIAL TENANCIES – landlord and tenant – release of rental bond – unpaid rent – who is responsible for damage to premises during the period of tenancy? – contribution of cost of replacement of damaged carpet and tiles

List of legislation: ACT Civil and Administrative Tribunal Act 2008 (ACT)

List of cases: Abela v Walker [1997] NSWRT 15

Cooper v Westpac General Insurance Ltd. [2007] ACTCA 20
Desai v Dowrick [1996] NSWRT 170,
Morley v Drew [1997] NSWRT 73
Russell v Oliver [1998] NSWRT 184
Taylor v Webb [1937] 2KB 283
Verscheure & Bradbury v Richards & Retmock (Residential Tenancies) [2009] ACAT 11

List of texts:The Federation Press, Residential Tenancies Law and Practice in New South Wales (4^th Edition) by Allan Anforth and Peter Christenesen pp70-74

Tribunal: Mr A. Morris, Registrar

Date of Orders: 18 February 2011
Date of Reasons for Decision: 18 February 2011

AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 618 of 2010

BETWEEN:

FENGXIA ZHOU
Applicant

AND:

L & N TAYLOR

Respondent

The Tribunal orders in respect of premises at A311/38 Gozzard Street GUNGAHLIN ACT 2912

The bond is to be disbursed as follows:
·$1191.00 to the Lessor or as the lessor shall direct; and
·$242.00 to the Tenant.
No order is made to costs.

………………………………..

Mr A. Morris
Registrar

REASONS FOR DECISION

At first glance, this matter presents as an application filed by the tenant for compensation. However, on closer examination, the situation is that this application is a call for the resolution of a dispute between the landlord - through their agent - and the tenant about damage to the property that allegedly occurred during the tenancy, and issues relating to the release of the bond.
I am aware that there are a number of other issues that were raised by the parties during the hearing. In no particular order of importance or relevance they included Ms Kover’s non-ongoing employment with Brogan Prestige Properties, allegations about parties’ credibility, the location of the trust monies, the existence or otherwise of insurance policies and other matters. In decision this matter, I have excised those matters that I consider not relevant to the resolution of the dispute, and not referred to them in deliberations.
The relevant facts are that:-
a.The tenant entered into a lease from 28^th May 2008 with the lessor through the agency of Brogan Prestige Properties (“the agent”) for a period of what appears to be 6 months;
b.
The bond was paid and receipted on 29^th May 2008, and lodged on

11^th June 2008;
c.After the fixed term, the tenant continued in occupation under periodic lease terms until early April 2010;
d.A final inspection was held in the absence of the tenant, on 8^th April 2010;
e.The tenant was represented by her husband and sister at the final inspection;
f.At the final inspection, certain damage was noted by the agent, being:
i.Staining on the carpet
ii.Staining on the kitchen tiles;
g.The agent with the agreement of the tenant and/or the tenant’s representative instructed the agent to have the stains removed;
h.The agent contracted Morgans Carpet Cleaning to look at the carpet cleaning, and used their own cleaners to look after the tile stains;
i.Morgans Carpet Cleaning reported that the carpet stains were too ingrained to be removed;
j.The agent’s cleaners could not remove the stains on the kitchen tiles;
k.The lessor, deciding that it would be too expensive to replace both the tiles and the carpet, made a decision to replace both area with matching tiles;
l.The cost of this work was advised to the tenant;
m.The tenant asserted that the amounts claimed were unreasonable.
Peripherally, there were other issues raised about the release of the bond and unpaid rent, but these were largely agreed by the end of the matter, and their resolutions do not form a part of the proceedings
It was the tenant’s position that the cost of repairs was either excessive, given the work needed, or that the repairs themselves were not repairs for which the tenant should be liable.
It was common ground that there was a cleaning sum of $165 which was agreed as appropriate to be paid for ordinary “tidy-up” cleaning. The dispute in this hearing revolved around the need for and the cost of repairs to the flooring surfaces.
I am accordingly called upon to decide two issues –
I accept the evidence provided that the damage to the tiles could not be cleaned by usual means. The tenant was clear that nothing she knowingly did caused that damage. But the evidence shows that the damage was not there prior to the tenancy commencing. Accordingly, I accept that the damage – inadvertent though it undoubtedly was – was caused by the tenant, or at the least, by someone not identified during the period for which the tenant was responsible for the premises.
As well as the tile damage in front of the dishwasher, there was carpet damage near the breakfast bar, possibly the result of spilling a container of orangeade there.
In respect of the carpet damage, I note that the landlords gave evidence that they tried the traditional means of mitigating their losses, i.e., they explored the possibility of patching the carpet with a piece taken from the cupboard. This was not possible in this case.
The tenant alleged that the tile damage was not her problem, as it must have been inadequately sealed tiles. However, she gave no evidence of this, and in the absence of some serious contention that I can understand, I am not able to accept an unsupported proposition such as this. I find therefore that the tenant must have caused or been responsible for the causation of the damage complained of.
As a general proposition, a tenant must maintain leased premises in a reasonable state of repair (Clause 55 of the standard lease conditions) and by inference must restore the premises following any damage to the unit occasioned by the tenant, fair wear and tear excepted (clause 64). In this case, I am satisfied that the tenant either caused or permitted damage to occur that was not capable of rectification.
Although there is an obligation to report such damage to the lessor

(Clause 63(b)), it is not clear when the damage arose. Neither is there any suggestion that earlier detection of the staining would have altered the need for more draconian rectification. I do not take this into account here.
The degree of responsibility for this as between the landlord to repair and the tenant to return a property in “substantially the same condition” (Clause 64(b)) was canvassed in ACT Court of Appeal decision in Cooper v Westpac General Insurance Ltd. [2007] ACTCA 20. Towards the end of that decision, the Court stated:
Clause 64 [of the lease] does not purport to impose any covenant to repair and is not in its terms inconsistent with clause 55. It appears under the heading "Tenant to look after the premises" and immediately after clause 63. That clause requires the tenants to refrain from intentionally or negligently damaging the premises or permitting such damage, to notify the lessor of any damage, take reasonable care of the premises, and to keep them reasonably clean, having regard to their condition at the time of the commencement of the tenancy and the normal incidents of living. Clause 64 (a) then requires the tenants to leave the premises in substantially the same state of cleanliness, removing all of their belongings and any other goods brought onto the premises during the duration of the tenancy agreement. Clause 64(b) adds the further requirement that they leave the premises in substantially the same condition as they were in at the commencement of the tenancy agreement, fair wear and tear excepted. ... It is, we think, sufficient to observe that there is no reason to assume that this somewhat vaguely worded covenant was intended to supplant the plain meaning of the words contained in clause 55.
The tenant also suggested that the damage might be construed as “fair wear and tear”, this being the exception to the obligations of clause 64(b). The phrase “fair wear and tear” was considered by the UK Court of Appeal in Taylor v Webb [1937] 2KB 283, and cited with approval in the ACT case of Verscheure & Bradbury v Richards & Retmock (Residential Tenancies) [2009] ACAT 11 where that Court stated that the phrase “wear and tear” refers to disrepair “brought about by the tenant or other person present on the premises with the consent of the tenant, either unintentionally or as a normal incident of a tenant’s occupation in the course of the ‘fair’ use of the premises for any purpose for which they were let”.
In the present case, the evidence suggests that whilst the damage was most likely caused unintentionally, I suggest that it is not a fair use of the premises to expect that a staining compound will be allowed to permanently stain a floor covering. By analogy, if a tenant erected a demountable cubby house in the garden, it would be a fair use. If that tenant put a permanent structure onto the house, it would not. It is, I think, the question of intended permanence that affects this situation and distinguishes this matter from the others.
The other point of contention between the parties in this matter was the age of the unit. The tenant appears to have asserted that it was old; the landlord that it was not. The landlord produced documentation that the property was purchased new in August 2006. In the absence of any other evidence, I am constrained to accept that the building and the contents are not more than 3 years old at the time of the dispute in this matter.
The evidence before me shows that the cost of repairs – being the retiling of the affected area, including the removal of the un-cleanable carpet and tiling of that area was:
Total $1,786.00
In dealing with this part of the decision, I am not including the $165 cleaning fee, which has been accepted by all parties, and, I understand, paid. The present sum held in trust is $1435 of the original bond of $1600. If it should turn out that this is not the case, parties may approach me on this issue solely, and I will adjust the decision by the $165.00. To make this point clear, I will not entertain any discussion about any other aspect of this decision (save for rectification of any obvious arithmetical error).
In the usual run of things, a landlord might expect carpets to last at least

10 years. I base this assertion on the Australian Taxation Office’s Tax Ruling IT 2008/4, which applies from 1^st July 2008 (sourced from Residential Tenancies Law and Practice in New South Wales, 4^th Edition, by Allan Anforth and Peter Christenesen pp70-74).
These floor treatments lasted from August 2006 to April 2010 – some 3¾ years.
Another approach to how carpets should be depreciated was set out in Abela v Walker [1997] NSWRT 15, where the Tribunal allowed that between 10% and 20% depreciation was appropriate depending on the quality of the carpet. In this matter, though, quality assessment is not available to me. I note too that other cases have made other assumptions, all in the same region, but all reached through different means. See in this regard Morley v Drew [1997] NSWRT 73, Desai v Dowrick [1996] NSWRT 170, Russell v Oliver [1998] NSWRT 184 and others.
Of course, all of these cases were in New South Wales, and bind neither the CTTT nor the ACAT. But their reasoning is instructive, and has been followed in other jurisdictions where the legislation is identical or similar.
In this matter, the lessor had about 1/3 of the useful life of the carpets, and therefore forewent about 2/3 of that sum. It follows from this that had the incident occurred after 10 years, the Tribunal might have allowed nothing to the lessor (as indeed it did in Russell v Oliver).
However, in this instance, where the damage occurred after 2/3 of the carpet’s useful life I intend to award the lessor 2/3 of the cost of replacement as the contribution from the tenant.
It has not escaped my notice that the depreciation period of floor tiles would presumably be considerably longer than carpets. Nobody has made submissions about that, and I have not been able to elicit any figures from my own research. But in the circumstances, I am satisfied to “lump” the costs together, and award the lessor 2/3 of the replacement costs, being the sum of (rounded up to the nearest dollar) $1,191.00
Thus in addition to the $165 already paid, I order that the bond be disbursed by the agent – which I understand in somewhat unusual, but unnecessary-to-comment-upon-here circumstances – to the lessor or as the lessor might direct in respect of accounts outstanding in the sum of $1,191.00 and to the tenant in the sum of $244.00
I note that it forms a part of the tenant’s application that she receive her costs of filing in this matter of $119.00. As the tenant has been largely unsuccessful in these proceedings, I decline to order this.

………………………………..

Mr A Morris
Registrar

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A FILE NO: RT 618 of 2010

APPLICANT: Fengxia Zhou
RESPONDENT: L & N Taylor

COUNSEL APPEARING: APPLICANT:

RESPONDENT:

SOLICITORS: APPLICANT:

RESPONDENT:

OTHER: APPLICANT:

RESPONDENT:
TRIBUNAL MEMBER/S: Mr A. Morris, Registrar

DATE/S OF HEARING: 19 November 2010 PLACE: CANBERRA

DATE/S OF DECISION: 18 February 2011 PLACE: CANBERRA

PART B

RECOMMENDATION:

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

COMMENTS: