Legislation: Residential Tenancies Act 1997, s 83 and standard residential tenancy terms (clause 96)

Cases: Baltic Shipping v Dillon [1993] HCA 4; (1993) 111 ALR 289.

Jarvis v Swan Tours [1973] 1All ER 71

Kiternas v Watts [2006] ACTRTT 4

Osuchowski & Scouller v Radojevic [2008] ACTRTT 13

Robinson v Harman [1848] EngR 135; (1848) 1 Exch 850.

Hadley v Baxendale [1854] EngR 296; (1854) 9 Exch 341

Texts/Papers: Shorter Oxford Dictionary (5th ed. 2003)

ACT CIVIL AND ADMINISTRATIVE TRIBUNAL XD 12/1096

1. Victoria Louise Edwards is to pay an amount of $3,500.00 to Ayoub Abuaagla on or before 29 August 2014.

1. The parties entered into a residential tenancy agreement: Ms Victoria Edwards as lessor (the applicant) and Mr Ayoub Abuaagla as tenant (the respondent). This agreement was dated 8 December 2010 and was expressed to be for a fixed term of 12 months, terminating on 12 December 2011. Thereafter, the residential tenancy agreement was a periodic tenancy.
2. As the lessor was not resident in the ACT, her parents, who held an enduring Power of Attorney from the lessor, attended some inspections of the property and liaised and negotiated with the managing agent. On 16 April 2012, the lessor's mother gave written instructions to the agent to issue a Notice to Vacate to the tenant. That letter stated "Victoria will be returning to Canberra to live in four weeks and will reside in her property at [address redacted], ACT".
3. On or about 16 April 2012, the lessor's agent served a notice to vacate upon the tenant upon the grounds that the lessor or lessor's immediate relative intended to reside at the premises. The termination date was 14 May 2012.
4. The tenant failed to vacate in accordance with the notice to vacate and, on 14 May 2012, the lessor lodged an application to ACAT for termination of the tenancy. The notice to vacate described in paragraph 2 was relied upon in that application.
5. The matter was heard on 8 June 2012 and the Tribunal made an order for termination of the tenancy and for possession to be given to the landlord on 29 June 2012. The order had effect as a warrant for eviction.
6. On 31 July 2012, the tenant made an application to restore the matter to the list and sought an order setting aside the termination and possession order made by the Tribunal on 8 June as well as an order that the lessor pay compensation to the tenant. The basis of this application was that the lessor had served a notice of termination on the ground that she intended to reside in the premises. The lessor had not entered into occupancy of the premises but had engaged a new real estate agent and the premises had been advertised for rent. After a conference between the parties, the Tribunal determined that the application should be stood over generally.
7. On or about 27 September 2013, the tenant filed an Application for Resolution of Tenancy Dispute, claiming $1,250.00 as economic loss and $1,500.00 as non-economic loss, pursuant to section 83(d) of the Act.

1. The lessor served a Notice to Vacate upon the tenant on or about 16 April 2012. That notice did not explicitly set out the grounds for the giving of the notice, but merely reproduced clause 96(1) of the standard residential tenancy terms under the Act (where a lessor or lessor's immediate relative intends to reside in the premises); and the notice did not give 28 days' notice as required by the residential tenancy agreement. The tenant did not vacate pursuant to that notice and the lessor made an application to the tribunal seeking a termination and possession order. That application stated that the landlord was relocating from Townsville.
2. That application was heard on 8 June 2012. The transcript of that hearing was provided by the tenant to the Tribunal. That transcript indicates that evidence was given to ACAT by Hodgkinson Real Estate and the lessor's attorney that the lessor intended to reside in the premises, that she was relocating from Townsville, that she was in her first trimester of pregnancy, and that her partner had left her. The tenant indicated that in the light of that information he would consent to a termination of the tenancy and provide vacant possession of the premises to the lessor on or before 28 June 2012. The Senior Member determining this application implicitly corrected the defects in the notice to vacate.
3. Senior Member Anforth stated:

Well what evidence do we have - let me just go back a step and just explain something. Yes that provision's there and it's there for a reason and includes the type of reason you're talking about when their landlord has to move back, the test to the Act doesn't actually require hardship on the landlord's grounds, it just means it only requires a genuine intent to move back.

... 2 or 3 years ago we had unfortunate circumstances of where there were notices based upon the facts that the landlord intended to live in the place... and so there's a four weeks' notice rather than 26 weeks [no grounds] notice. So there's a definite advantage in issuing a notice in this ground rather than on a no grounds ground, okay?

Landlords mostly through their agents were issuing notices to terminate tenancies being notices saying landlords were moving back in ... Tribunal members were accepting the agent's evidence at face value, ...

There were a couple of instances where there was follow-up done. And the follow-up disclosed that notwithstanding the notice had been issued stating the landlord would move into the premises they didn't and the landlords advertised the premises and rented it on the commercial market to another tenant.[1]

1. The real estate agent and the lessor's parents each assured the Tribunal that the landlord had a genuine intention of residing in the premises.
2. The tenants vacated the premises pursuant to the order made by the tribunal on 8 June 2012. The premises were advertised as available for rent on allhomes.com.au through P & P Real Estate on 12 July 2012.
3. The tenants made an application to the tribunal for compensation for both economic and noneconomic loss as a result of consenting to the order made on 8 June 2012. The application is brought pursuant to section 83(d) of the Act, seeking compensation for a breach of the residential tenancy agreement. That is, for serving an invalid notice to vacate pursuant to clause 96 of the residential tenancy agreement on the grounds that the landlord intended to reside in the premises.
4. ACAT received the following evidence:
   • (a) a copy of the advertisement on allhomes.com.au dated 12 July 2012;
   • (b) a copy of a letter dated 16 April 2012 from Mrs Sonja Edwards to Hodgkinson Real Estate Pty Ltd stating that the lessor will return to Canberra to live in four weeks and will reside and her property at 13/126 Thynne Street, Bruce;
   • (c) a copy of correspondence between the lessor and her superior officers relating to possible military postings: email correspondence with Major Toni Bushby indicates that in February 2012 there was a possibility that the lessor would be posted to St Vincent's Hospital in Sydney and that there was also a possibility of a posting to Brisbane; and
   • (d) a copy of an Army Posting Order dated 5 July 2012 indicating that the lessor had been posted to a position at St Vincent's Hospital in Sydney.
5. The respondent made submissions asserting a genuine intention to live in the premises for the combined reasons of:
   • (a) the infrequent or deficient rental payments being made to the lessor by the tenant that had caused some financial strain on the lessor;
   • (b) the lessor's concerns for the condition of the property;
   • (c) her general dissatisfaction with her employment in the Australian Regular Army; and
   • (d) her health issues associated with serving in the tropics.
6. ACAT notes that none of the evidence provided by the lessor supports her assertion that she genuinely intended to reside in the premises. There is no evidence to support the statements made by the lessor's parents to the Tribunal in the hearing on 8 June 2012. There is no evidence to support the submissions made by the respondent landlord.
7. Clause 96 (1)(a) of the residential tenancy agreement provides that a lessor may serve on a tenant a notice to vacate giving four (4) weeks notice "if the lessor genuinely intends to live in the premises". The Shorter Oxford English Dictionary (5th ed. 2003) defines 'genuine" as:

"Having the character claimed for it: real, true, not counterfeit and (of a person) free from affectation or hypocrisy"

1. ACAT is satisfied that the lessor did not have a genuine intention to reside in the premises at the time of the serving upon the tenant of the notice to vacate on the grounds that the lessor intended to return to the property.
2. The tenant makes a claim for a total of $1250 economic loss as follows:
   • (a) removal's costs $440,
   • (b) end of lease cleaning $550,
   • (c) carpet cleaning $160, and
   • (d) incidental costs $100.
3. The tenant seeks compensation for non-economic loss as a result of the stress suffered by the tenant and his wife as a result of the unlawful notice to terminate, finding other suitable accommodation in a limited period of time and disruption to the family while coping with the birth of a new baby.
4. Section 83 of the Act provides that ACAT may make an order in relation to an application about a tenancy dispute requiring the payment of compensation for loss of rent or any other loss caused by the breach of a residential tenancy agreement. The service of a notice to vacate on the grounds that the lessor intended to reside at the premises in the circumstances where the lessor had not formed a genuine intention to reside at the premises is a breach of contract.
5. A party who suffers damage as a result of a breach of contract by another party is entitled to an amount of damages which will, as far as possible, put the injured party in the same position they would have been in had the breach not occurred. That is, damages for breach of contract are compensatory. Robinson v Harman [1848] EngR 135; (1848) 1 Exch 850. The innocent party must establish that the loss complained of was caused by the breach of contract and that the loss was not too remote from the breach. The rule in Hadley v Baxendale [1854] EngR 296; (1854) 9 Exch 341 is applied to determine which loss is recoverable. An innocent party may recover damages caused by a breach of contract if they are the types of loss that occurs in the usual course of events, or arise naturally from the breach, or where the loss complained of may be reasonably supposed to have been in the contemplation of the parties at the time they made the contract to be likely to result from the breach.
6. While damages for personal distress or pain and suffering are not usually awarded for a breach of contract, recent decisions indicate that such an award is appropriate and proper where the contract itself promised peace, comfort, and enjoyment or relaxation. Damages have been awarded for non-economic loss resulting from a breach of contracts relating to holidays and weddings. Jarvis v Swan Tours [1973] 1All ER 71; Baltic Shipping v Dillon [1993] HCA 4; (1993) 111 ALR 289.
7. Damages have been awarded in this tribunal for unlawful eviction in the circumstances of this matter in Osuchowski & Scouller v Radojevic [2008] ACTRTT 13 and Kiternas v Watts [2006] ACTRTT 4.
8. The tribunal is satisfied that the tenant had suffered economic loss, but notes that the losses claimed are of a type which would ordinarily be incurred by a tenant at the end of the tenancy, although this tenancy has ended as a result of a breach by the landlord and at a time sooner than would otherwise have been the case, and the tribunal discounts the amount claimed to $1000. The tribunal is satisfied is satisfied that the tenant has suffered emotional stress and upset as a result of the unlawful notice to vacate. Taking into account the amounts awarded in similar circumstances, and the evidence before it the tribunal determines that the lessor should pay to the tenant compensation for that stress and upset in the amount of $2500.

[1] Transcript of Proceedings (RT 503 of 2012), 8 June 2013, pages 3-4