Legislation: Residential Tenancies Act 1997, ss 6A, 7, 36, 37, 39, 42A,

42B, 49, 56, 58, and 60-63, and Clause 64 of Prescribed Terms

Cases: ACT Housing v Mildwater [2006] ACTRTT 3

Coleman v Power [2004] HCA 39; (2004) 220 CLR 1

Commissioner for Social Housing in the ACT v Lowe

[2013] ACAT 49

Community Housing Canberra t/as CHC Affordable Housing v Connell [2013] ACAT 68

Devenport v Commissioner for Housing in the ACT and Residential Tenancies Tribunal [2007] ACTSC 30

Fisher and Commissioner for Social Housing in the ACT [2012] ACAT 32

Maloney v Commissioner for Social Housing in the ACT

[2013] ACAT 74

Mangubat & Commissioner for Social Housing in the ACT [2013] ACAT 6

Progressive Mailing House Pty Ltd v Tabali Pty Ltd

[1985] HCA 14; [1985] 157 CLR 17

Texts/Papers: The Community Law Reform Committee of the Australian

Capital Territory, Report No. 8 (1994), Private Residential Tenancy Law

ACT CIVIL AND ADMINISTRATIVE TRIBUNAL RT 12/391

1. These proceedings were instituted on 15 May 2013 by the Commissioner for Social Housing (Commissioner) filing an application for an order pursuant to section 42A of the Residential Tenancies Act 1997 (RTA), on the basis that a conditional termination and possession order made by the Tribunal on 17 May 2012 had not been complied with, and Ms Moffatt (the tenant) remained in possession of the property.

2. The application was opposed by the tenant. The tenant conceded that payments required by the conditional termination and possession order had been missed. She argued, in the alternative, that either the order had operated on

29 May 2012 but due to the conduct of the parties a fresh tenancy agreement had arisen; or the order had operated but not so as to terminate the tenancy, and the Tribunal should in exercise of its discretion make a further conditional termination and possession order.

3. The application was heard on 21 August 2013 and the decision reserved, with liberty to the parties to provide further submissions. The applicant provided further written submissions on 18 September 2013 and the respondent provided further submissions on 19 September 2013.

4. At the hearing, the Commissioner relied upon the application filed on

15 May 2013, the conditional termination and possession order made on

17 May 2012 (order), a statutory declaration of Ms Kazanc (an employee of the Commissioner) which asserted a failure to make payments in accordance with the order, and a recent printout of the rental account relating to the tenancy. No witnesses were called on behalf of the Commissioner.

5. In support of her case, Ms Moffatt gave evidence at the hearing, as did her cousin Mr Ryman. A number of documents from the Commissioner's file relating to the tenancy were also put into evidence by the tenant.

6. Ms Moffatt commenced her tenancy on 4 July 2011. She has three children, all of whom who live with her, and she relies on support from her mother who lives nearby to assist her in caring for them. At all material times she has, on her income, been eligible for housing assistance provided by the Commissioner in the form of a rental rebate. She fell behind with her rent, and on 17 May 2012 the Commissioner applied for, and was granted, a conditional termination and possession order. The arrears at that time were $5,421.05, and the rent after application of the rebate was $165.55 per week ($331.10 per fortnight).

7. Ms Moffatt, who was not legally represented during those proceedings, consented to the order, which required repayment of the arrears at a rate of $30 per fortnight, commencing on 28 May 2012.

8. The outcome of the proceedings on 17 May 2012 was recorded in the computerised records of the Commissioner "Homenet" on 18 May as follows:

"to pay 5421.05 (rent owed) by instalments of $30.00pf. T&P 12:00 noon day after default. Liberty to apply for WOE. Order expires 16/05/14)"

9. On 25 May 2012, Ms Moffatt made a payment of $170. No other payment was made before or on 28 May 2012. Both parties agreed at the hearing before me that the requirements of the order were not met in relation to the first payment of arrears.

10. On 20 June 2012, an officer from the Commissioner spoke with Ms Moffatt's support worker from the Supportive Tenancy service. The contents of that discussion are unknown; neither party to the conversation gave evidence in these proceedings. The Homenet entry for that event records "Attempted contact. No answer. HM spoke with Erin from Supportive Tenancy today regarding tenant not being contactable. Tenant has not been keeping up with the legal agreement." By 20 June 2012, then, the Commissioner was aware of Ms Moffatt's failure to comply with the order.

11. Coincidentally, also on 20 June 2012, Ms Moffatt applied to the Commissioner for a rent rebate in relation to her future rent. On 26 June 2012, that application was approved. The letter of confirmation sent to Ms Moffatt on 26 June 2012 noted, in bold text:

You will be required to pay a weekly rent of $163.60 from 8 July 2012.

If you have a current arrears repayment arrangement, or there is an Order from the ACT Civil and Administrative Tribunal to pay off arrears, the repayment instalment must be added to the Weekly Rebated Rent shown above. ...

12. On 5 July 2012 the officer of Commissioner wrote to Ms Moffatt in the following terms:

As at 30 June 2012 you were $6025.45 behind in your rent.

Your Tenancy agreement requires that rent must be paid fortnightly in advance. Therefore, to bring your account up to date, you are required to pay $6356.55 before 15 July 2012.

To keep your account up to date you must pay your normal fortnightly rent of $331.10 every fortnight after that. [arrangements for an appointment were then set out] ...

If your account is not up to date and you do not attend this appointment legal action will proceed. This will include issuing you with a Notice to Vacate the property and action to recover the debt. ...

13. It is not clear whether the appointment, which was rescheduled, was ultimately kept or not. Certainly, the account was not brought up to date.

14. On 3 August 2012, Ms Moffatt submitted to the Commissioner a Centrepay deduction form, authorising rebated rent and an additional $30 per fortnight to be deducted from her Centrelink payments. That form was processed by the Commissioner on 7 August 2012, and deductions under that authority proceeded from 20 August 2012.

15. On 10 October 2012, Ms Moffatt contacted the Commissioner and requested that payments be halted for a fortnight due to the need for emergency surgery. Homenet records "Tenant will be adding extra to her agreement to fix up missed fortnight".

16. Ms Moffatt did not recommence her rent and arrears payments, and officers of the Commissioner were unsuccessful in trying to make contact with her. On

21 November 2012, the Commissioner referred the matter to 'Operational Services' (apparently a division of the Commissioner) to seek an unconditional termination and possession order, however it transpired that that referral was not the subject of any activity.

17. Meanwhile, on 27 November 2012 Ms Moffatt completed a new rental rebate application (it being six months since the last application) and new Centrepay deduction form. The Commissioner processed that form, and proceeded to deduct one payment of $340 for rent on 10 December 2012. No deductions for arrears were made - Homenet records 'rent only as tenant is on a legal agreement'. (It is not clear, if this is the position of either Centrelink or the Commissioner, why the earlier Centrepay deduction form permitted the deduction of $30 arrears per fortnight.)

18. On 18 December 2012, the Commissioner wrote to Ms Moffatt advising her of approval of her application for a rental rebate. Aside from updated financial details, this letter was in the same terms as the letter of 26 June 2012.

19. On 10 January 2013, the Commissioner wrote to Ms Moffatt advising her of the Commissioner's right under the tenancy agreement to inspect the home twice per year, and scheduling an inspection for 23 January 2013. That inspection occurred as scheduled, and at that time - according to the Homenet records - the Housing Manager informed Ms Moffatt that "her account would be referred back to the tribunal due to non payment of legal agreement."

20. On 12 February 2013, some 8 months after first becoming aware of

Ms Moffatt's default, the Commissioner sent a letter to Ms Moffatt referring to the conditional termination and possession order of 17 May 2012 and asserting "As you have breached the above Orders the matter has been referred to the Housing Assistance and Tenancy Review Panel (HATRP) for consideration."

21. Ms Moffatt attended the Housing ACT office on 15 March 2013 and met with the Southern Regional Manager. She explained that she had been suffering from depression, however had supports in place. The Manager told Ms Moffatt that a recommendation was being sought for a warrant for eviction, at which time Ms Moffatt became upset and said that she was not aware of the situation.

22. Ultimately, on 6 May 2013 Ms Moffatt was advised by letter that the Commissioner intended to seek an unconditional termination and possession order with effect as a warrant for eviction. The Commissioner filed the current application on 15 May 2013 seeking "an order terminating the tenancy under section 42A of the Residential Tenancies Act". At the time, the arrears of rent were asserted to be $10,166.60.

23. Ms Moffatt gave evidence at the hearing and briefly explained her personal circumstances. She has a medical history of brain surgery, and still suffers from seizures. She suffers currently, and has suffered in the past, from depression. She takes medication which affects her mood. She has had contact with mental health authorities in the past, and has attempted suicide, most recently after receiving correspondence early this year from the Commissioner. Due to her health issues and the medication she is on she has difficulty organising or prioritising tasks.

24. Ms Moffatt gave evidence that in addition to her mother who lives nearby, her cousin Mr Ryman also provided her with support. She said that she had agreed that he should be appointed her financial manager so as to ensure that her financial responsibilities were met in the future. Mr Ryman gave evidence to the same effect, and also advised that he was hopeful of receiving an inheritance from a house in Queensland, which he would use to pay off Ms Moffatt's debt in full.

25. On 10 September 2013, in separate proceedings under the Guardianship and Management of Property Act 1991 the ACAT made an order appointing

What is the nature of the application before the Tribunal?

26. The application filed on 15 May 2013 was curiously worded, in that it sought "an order terminating the tenancy under 42A of the Residential Tenancies Act 1997". Section 42A does not provide that application may be made under that section for an order terminating a tenancy. Rather, it provides for a lessor to file an application for a warrant for eviction in certain circumstances:

42A Failure to comply with conditional order

_(1) A lessor may apply to the registrar for a warrant for the eviction of a person if - _

(a) the ACAT has issued a conditional termination and possession order; and

(c) the lessor satisfies the registrar that the condition has been satisfied; and

(d) the person to whom the order was directed continues to live at the premises.

_(2) On receiving an application for a warrant, the registrar must - _

(a) list the application for hearing before the ACAT not earlier than 1 week after the day the notice under paragraph (b) is given to the person; and

_(b) give notice to the person to whom the conditional termination and possession order is directed stating - _

(i) that an application for a warrant for eviction has been made; and

(ii) the time when, and the place where, the application is to be heard; and

(iii) that the person should seek legal advice about the application if the person wants to continue to live at the premises.

27. When such an application is heard by the Tribunal, section 42B provides with specificity the approach that must be taken by the Tribunal and the orders that may be made at the conclusion of that hearing:

(1) An application under section 42A must be decided as if it were an application under section 49 for a termination and possession order.

_(2) After considering the application and hearing the parties who attend the hearing, the ACAT must - _

(3) If the ACAT allows the application, the ACAT must direct the registrar to issue a warrant for the eviction of the person.

_(4) If the ACAT dismisses the application, the ACAT may - _

(a) confirm the conditional termination and possession order; or

(b) make another conditional termination and possession order; or

(c) set aside the conditional termination and possession order.

28. It can be inferred that the application in this case was worded so as to seek "an order terminating the tenancy" because the Commissioner sought on the one hand to rely upon breach of the conditional termination and possession order as grounds for termination, and at the same time to refute any suggestion that a fresh tenancy agreement could be in place between the parties as a consequence of the Commissioner's conduct in the period since the breach occurred. In simple terms, it was argued that because the first residential tenancy agreement was still in force, a new residential tenancy agreement could not be implied.

29. The Welfare Rights and Legal Centre on behalf of Ms Moffatt argued in the alternative that the Tribunal should find that the tenancy did not terminate upon failure to comply with the conditional termination possession order and the tenancy continued in force unless and until the Tribunal terminated the tenancy under section 42A, however if the Tribunal was to find that the conditional termination and possession order was self-executing, then it was put on behalf of Ms Moffatt that the Commissioner's actions after operation of the order were such as to give rise to a new tenancy agreement.

30. The circumstances of this case therefore squarely raised the following legal questions:

(a) Does the satisfaction of a condition of a conditional termination and possession order terminate the residential tenancy agreement?

(b) If so, can the subsequent conduct of parties to the terminated agreement lead to implication of a new residential tenancy agreement?

31. For the reasons that follow, I consider that both of these questions should be answered in the affirmative.

Did the failure to comply with the arrears payment schedule as directed by the conditional termination and possession order terminate the tenancy?

32. The starting point for this inquiry must be a consideration of the conditional termination and possession order that was made on 17 May 2012.

33. Order 1 required repayment of the arrears at $30 per fortnight, commencing on 28 May 2012, as well as payment of rent in accordance with the residential tenancy agreement.

2. If the tenant fails to comply with any of the conditions set out in order 1 above:

(i) the tenancy terminates at 12:00 noon on the day after the tenant's failure to comply with the condition;

(ii) the lessor is entitled to vacant possession of the premises on termination of the tenancy;

(iii) all rent payable including any rent which has accrued from the date of this order, is payable immediately.

"THE TRIBUNAL NOTES THAT if the tenant continues to live at the premises after the termination of the tenancy, the lessor may apply for a warrant for the eviction of the tenant. A warrant for the eviction of the tenant may issue if the criteria set out in section 42A of the Residential Tenancies Act 1997 are met."

35. A conditional termination possession order is an order made pursuant to subsection 49(4) of the RTA_,_ in relation to unpaid rent. That section provides:

_(4) Instead of making a termination and possession order under subsection (1), the ACAT may order (conditional termination and possession order) that if the tenant fails to pay the rent that has become payable, or future rent as it becomes payable, as required by the ACAT - _

(a) the tenancy terminates at a stated hour on the day after the day when any rent becomes payable and is not paid; and

(b) the lessor becomes entitled to possession of the premises and all rent payable is payable immediately.

36. There are two aspects of the order of 17 May 2012 which should be noted. First, it is clearly expressed in self-executing terms. Secondly, it complies with the requirements of the RTA as set out in subsection 49(4) and section 39[1]. On its terms, the order of 17 May 2012 (as set out at paragraph 34 above) is self-executing.

37. Both the Commissioner's and Ms Moffatt's solicitors submitted that the order, despite its clear terms, was not self-executing. Nonetheless, the Tribunal is not bound by the views of the parties as to the operation of the statute, but must independently satisfy itself as to the correct operation of the order and interpretation of the law.[2]

38. In recent matters before this Tribunal the question has been raised whether a conditional termination and possession order is truly self-executing, or whether it operates only after the Tribunal has found that the relevant facts have occurred, in the course of a hearing of an application under section 42B of the RTA. There have been a number of different views expressed by the Tribunal.

39. In ACT Housing v Mildwater [2006] ACTRTT 3, which has in some subsequent cases been referred to approvingly, the Tribunal stated "where there is a breach and the lessor takes no action the tenancy does not end, and, the rights and obligations created by the termination and possession order on condition remain in force."

40. There are recent cases which take a contrary view. In Fisher and Commissioner for Social Housing in the ACT [2012] ACAT 32 at paragraphs 25 and 26, and in Mangubat & Commissioner for Social Housing in the ACT [2013] ACAT 6 at paragraph 86, it was stated that a conditional termination and possession order operates, when the condition is satisfied, to terminate the tenancy. Paragraph 86 of Mangubat is as follows:

86 Section 49(4) is intended to operate as a self executing order. The further intervention of the Tribunal, once a conditional termination and possession order is made, is usually only necessary when a tenant does not vacate the premises as required. Obviously, if a tenant does not agree with the lessor's assertion that the tenant has failed to pay rent as required by the Tribunal, then the tenant would resist the section 42A application on that basis and the Tribunal is able to make appropriate orders under section 42B.

41. In Commissioner for Social Housing in the ACT v Lowe [2013] ACAT 49, the Tribunal, after noting that no contrary argument was put by the tenant on this point, concluded at paragraph 64 that "The Tribunal is satisfied that a breach by the tenant of his or her obligations under a CTPO does not, of itself, terminate a residential tenancy agreement for all purposes." Similar wording was used by the Tribunal in Maloney v Commissioner for Social Housing in the ACT [2013] ACAT 74.

42. While there is consensus that a conditional termination and possession order does not terminate the tenancy for all purposes, there is no binding authority on whether a conditional termination and possession order made under

subsection 49(4) of the RTA is self-executing. It is therefore necessary to go back to first principles and consider the question afresh.

43. Much of the reasoning proffered in the cases cited above, and repeated in the Commissioner's submissions in this matter, involved the posing of hypothetical fact scenarios and querying the results of adopting differing interpretations of the law to those scenarios. It is a long accepted principle of statutory interpretation that one may have regard to the consequences of adopting a particular interpretation in order to determine which of competing interpretations should be preferred. However, this tool should be used cautiously, as it provides the potential for the court or tribunal to inadvertently substitute its preferred policy or procedural outcome for that intended by the legislature.

44. The starting point to interpretation of a statute should be with words of the provision itself. The interpretation which promotes the purpose of the legislation must be preferred. Reference should be had to the broader legislative context of the Act, and, where relevant, also to extrinsic materials which provide evidence of the legislature's intended operation or purpose. It is only after conducting such a rigorous examination that one is in a position to properly consider whether a particular interpretation gives rise to perverse, unexpected or unintended consequences.

45. I turn first, then, to the language of section 49. Section 49 provides for the making of a termination and possession order in cases of rental arrears. As an alternative to making a termination and possession order under subsection (1), subsection (3) provides that in specified circumstances the ACAT may make a conditional termination and possession order under subsection 49(4).

46. When one considers subsection 49(4), the order described appears to be a self-executing order. This is made particularly clear by the requirement of subparagraph (a) that the order itself provide for termination to occur at a specified time on the day following default.

47. As noted by the Full Court of the Supreme Court in Devenport v Commissioner for Housing in the ACT and Residential Tenancies Tribunal [2007] ACTSC 30 subsection 49(4) is the only provision in the RTA for the making of a self-executing order:

19. This is an express power to make a conditional order that will have the effect of obliging the tenant to act in a particular way - by paying the rent - and will provide that the termination order becomes effective at some future time if the tenant fails to comply with this condition. The section is based on the recommendations of the Community Law Reform Committee Report pars 854-858. ...

48. That such an order is self-executing is consistent with the recommendations of the Community Law Reform Committee (CLRC) Report on Private Residential Tenancy Law[3], at paragraph 857:

857. The Committee considered procedures for termination and eviction in cases where the tribunal refuses termination on the condition that the tenant repay the rent owing over time and the tenant fails to make the repayments required by the tribunal. The Committee considers that in this case the lessor should be able to obtain possession of the premises with little further delay. It should not be necessary for the lessor to have to give further notice of termination to the tenant and return to the tribunal for a termination order. The Committee recommends as follows:

Recommendation 159: Where the tribunal refuses to terminate the tenancy on the grounds of failure to pay rent on the condition that the tenant repay rent owing and the tenant fails to meet the repayment schedule of the tribunal then the following should apply:

• The lessor need not apply to the tribunal for a termination order;
• The tenancy should terminate and the lessor should be entitled to possession of the premises at 5:00 pm the day after the day on which the rent was due and not met;
• All rent owing at this time shall fall due;
• If necessary the lessor may apply to the registrar for authorisation of eviction.

49. The similarity between recommendation 159, and the subsequent drafting of subsection 49(4) of the RTA, is telling.

50. The Commissioner invited the Tribunal to disregard the clear words of the order made in this matter, and the clear words of subsection 49(4) which prescribe what such an order should say, and instead find that a conditional termination and possession order does not itself operate to terminate tenancy agreement until the Tribunal, in relation to an application filed under section 42A of the RTA, finds that the condition precedent has been met. The Commissioner submitted that this interpretation was supported by a reading of the provisions of the RTA as a whole.

51. In support of this 'context' argument, the Commissioner referred to section 36 of the RTA which prohibits termination of a residential tenancy agreement except in specified circumstances. One of those circumstances is specified by subsection 36(d) as where " the ACAT makes a termination and possession order", another is subsection 36(e) where 'the tenant abandons the premises'. The Commissioner argued that where a condition precedent of a conditional termination and possession order is met, and the tenant vacates the premises, the residential tenancy agreement ends upon the tenant leaving the premises because of subsection 36(e). The Commissioner submitted that in all other cases of operation of the condition precedent, where the tenant does not leave the premises, the residential tenancy agreement would not terminate until a finding by the Tribunal that the condition precedent was made out, and the Tribunal then making an unconditional termination and possession order.

52. I am not persuaded by this submission, for a number of reasons.

53. First, the reference to 'abandonment' in subsection 36(e) is clearly a reference to abandonment under sections 60 - 63 of the RTA.

54. Secondly, and most significantly, the phrase "termination and possession order" is defined in the dictionary to the RTA as meaning "an order of the tribunal terminating a residential tenancy agreement and granting vacant possession of the relevant premises to the applicant for the order." A conditional termination and possession order made in accordance with subsection 49(4) meets the requirements of this definition just as an unconditional termination and possession order does. If it had been intended to limit subsection 36(d) to unconditional termination and possession orders only, the word 'unconditional' would have been included in section 36(d).

55. The Commissioner submitted that a conditional termination and possession order could not be a 'termination and possession order' as envisaged by subsection 36(d), as it lacks both the finality and certainty required for termination. I am not persuaded by this somewhat circular argument. The order under subsection 49(4) being both self-executing, and certain in its application, was the subject of comment by the Supreme Court in Devenport:

21. It also seems to us that the legislature here has distinguished between applications for eviction based on failure to pay rent where an express power is made for a conditional order, and applications based on other breaches. The reasons for this distinction may be thought clearly apparent, in that a form of conditional order based on future compliance to pay both arrears of rent on specified days and ongoing rent as it falls due is clear and easily determined. It is a simple factual question as to whether the due amount was paid on the due date.

56. The Commissioner asserted that if a condition precedent under a conditional termination and possession order operated and the tenant did not vacate the premises, this sequence of events was insufficiently certain or final to satisfy subsection 36(d). The reasoning provided by the Commissioner was that the lessor, for any number of reasons, might choose not to exercise the right to apply for a warrant for eviction, or that the Tribunal might be satisfied by the tenant that the condition precedent was not met, or the tenant might remedy the default and the Tribunal exercise discretion to dismiss the application, or the tenant might satisfy the Tribunal that it was appropriate to make a further conditional termination and possession order.

57. None of these hypothetical situations are unable to be accommodated within an interpretation of the order as having been self executing, nor is an unworkable result produced by such an interpretation. Similar fact situations currently occur where an unconditional termination and possession order has been made - a lessor may choose not to apply for a warrant, a tenant may apply to the tribunal to set aside an unconditional termination and possession order made in their absence.

58. There is no doubt that in cases where a lessor has failed for a significant period of time after termination of a tenancy agreement to take action to seek a warrant for eviction, the factual and consequently legal matrix may become complicated. However, the difficulty in unravelling the legal relationship that has evolved is insufficient justification for disregarding the plain language of the conditional termination and possession order, which is prescribed by the legislation.

59. Although the Commissioner submitted that subsection 49(4) of the RTA should be interpreted in its legislative context, the Tribunal was not taken by the Commissioner to any provisions of the RTA other than section 36. For completeness, it is important to note the following provisions of the RTA:

60. First, section 49(4) itself requires that the order specify that the tenancy agreement terminate at a specified time on the day following default, and that the lessor is thereafter entitled to possession. If the order is not self-executing, then these words are unnecessary as it would be open to a subsequent tribunal to determine that the tenancy agreement terminated at any time after default.

61. Secondly, section 39 of the RTA provides the content of a termination and possession order. This content is consistent with the content of an unconditional termination and possession order prescribed by subsection 49(4).

62. Thirdly, section 42A provides that application may be made to the registrar for a warrant for eviction upon the condition precedent of a conditional termination and possession order being satisfied. If that order was not self executing, the appropriate application to be made in such a case would, presumably, be an application for an unconditional termination and possession order with effect as a warrant of eviction.

63. Fourthly, there is no provision in the RTA for an unconditional termination and possession order to be made as a consequence of a condition precedent of a conditional termination and possession order being satisfied.

64. Finally, section 42B expressly provides that after hearing the application under section 42A, if the application is allowed, the ACAT must direct the registrar to issue a warrant for eviction. If the Commissioner's proposed interpretation is adopted, the ACAT after allowing an application should be required to make an unconditional termination and possession order. Section 42B does not include provision for such an order.

65. The entirety of the RTA, as I have considered it, is consistent with a conditional termination and possession order being self-executing. I have been unable to find any provision in the RTA which is inconsistent with a conditional termination and possession order being self-executing. While I do not consider that there is any ambiguity in subsection 49(4) to be resolved by reference to extrinsic material, I note that reference to the CLRC report confirms that such an order was intended to be self-executing.

66. It follows that I am satisfied that a conditional termination and possession order is self executing in the sense that it terminates a residential tenancy agreement, although this does not mean that all of the rights and obligations of the parties under that agreement end at the time of termination.

What effect does operation of the conditional termination and possession order have upon a tenancy?

67. In this matter, I am satisfied that a conditional termination and possession order was made on 17 May 2012, and the tenant Ms Moffatt failed to make a payment on 28 May 2012 required by that order. By operation of order 2 of the conditional termination and possession order, the tenancy terminated at 12 noon the following day, and the lessor was entitled to vacant possession of the premises, with all rent payable including rent which had accrued from the date of the conditional order being payable immediately.

68. As at the date of termination, according to the rental account provided by the Commissioner, an amount of $5,582.15 was outstanding, and became immediately due and payable.

69. As noted in Lowe, operation of a conditional termination and possession order "does not terminate a residential tenancy agreement for all purposes". Certain obligations under the agreement arise only upon termination of the agreement, such as the obligation imposed by clause 64 of the prescribed terms to leave the premises in the same state of cleanliness and condition as at the commencement of the tenancy agreement.

70. Most importantly, despite termination of the tenancy, recovery of possession of the property cannot be obtained except by a warrant of eviction -

subsection 37(5) prescribes possession as a former tenant continuing to reside in the premises as possession that may not be interfered with except in accordance with a warrant issued by the registrar, or an order or warrant of the ACAT or an order of or judgement of the Supreme Court.

71. Other obligations of the tenant under the residential tenancy agreement cease to operate upon termination of the agreement. The obligation to 'pay rent on time" as specified by the prescribed terms is one such obligation. The scheme of the RTA recognises that where a tenancy agreement is terminated, the obligation to pay rent also ends, however in certain cases the tenant may be exposed to a claim for compensation by the lessor which might be set by reference to the rent previously payable. For example, this may be a claim by the lessor for compensation for early termination by the tenant - which pursuant to section 64 or section 83 may be assessed by reference to the unpaid rent for the remainder of the term.

72. In the case of failure by the tenant to vacate premises in accordance with a termination and possession order, section 56 of the RTA provides that where a person to whom a termination and possession order is directed fails to vacate the premises in accordance with the order, the ACAT may order the person to pay an amount equal to rent that would have been payable together with the reasonable costs incurred by the applicant in applying for a warrant for eviction and having the warrant executed.

73. These provisions of the RTA in relation to compensation for lost rent caused by failure of the tenant to vacate the premises after termination are consistent with the common law background against which the RTA was enacted. As noted by Brennan J in Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; [1985] 157 CLR 17:

"2. When a lease is determined prior to the expiry of the term, the covenant to pay rent for the unexpired portion of the term ceases to bind the lessee. Once the lease is determined, the lessee commits no breach of covenant by reason of his non-payment of rent for that unexpired portion: Jones v. Carter (1846) 15 M & W 718, at p 726 [1846] EngR 856; (153 ER 1040, at p 1043). A lessor who, under a proviso for re-entry, serves the lessee with process for recovery of possession is entitled to mesne profits for the period during which the lessee remains in possession after service (Canas Property Co.Ltd. v. K.L.Television Services Ltd. (1970) 2 QB 433). The lessor may thereby recover an amount equal to the rent in respect of that period. But mesne profits are damages for trespass; mesne profits are not rent, nor are they damages for breach of a covenant to pay rent."

What is the legal effect of the actions of the parties post operation of the conditional termination and possession order?

74. The tenant submitted that if it was the position of the Tribunal that the previous tenancy ended upon satisfaction of the condition precedent of the conditional termination and possession order, then the tenant would submit to the Tribunal that the relationship of the parties after termination of the tenancy agreement should be characterised as a new residential tenancy agreement.

75. The Commissioner argued that the Tribunal should not find that the circumstances of this case were such as to create a new tenancy agreement between the parties.

76. As a starting point, the Commissioner submitted that a residential tenancy agreement is subject to the ordinary principles of contract law as modified by the Act. The Commissioner asserted that at a basic level this required that there be an offer, acceptance, intention to create legal relations, and capacity.

77. Although the principles of contract law can be of relevance to the Tribunal in determining a dispute in relation to a residential tenancies agreement, it is going too far to assert that these principles in relation to what is a legally binding contract must be met before a residential tenancies agreement can arise under the RTA.

6A What is a residential tenancy agreement_?_

(1) An agreement is a residential tenancy agreement _if, under the agreement - _

(a) a person gives someone else (the tenant) a right to occupy stated premises; and

(b) the premises are for the tenant to use as a home (whether or not together with other people); and

(b) in writing, oral, or partly in writing and partly oral.

79. The use of the word "agreement" in section 6A rather than the word "contract" militates against the adoption of strict principles of contract law in this area. [4]

80. I have addressed in the matter of Community Housing Canberra t/as CHC Affordable Housing v Connell [2013] ACAT 68 the requirements of section 6A in relation to the implication of a residential tenancy agreement and would repeat those observations here. It is clear that intentional elements are required due to the use of the words 'agreement', 'gives' and 'given for'. Occupation without the lessor's knowledge or acceptance of rent unknowingly, would not constitute an agreement.

81. In this case, the application for a warrant for eviction was not filed until

15 May 2013, many months after the conditional termination and possession order had operated on 28 May 2012. In the intervening period, Ms Moffatt had twice applied for, and being granted, a rebate of her future rent payments. The correspondence sent by the Commissioner to Ms Moffatt consistently referred to her rent payments, made arrangements for the collection of future rent, and asserted the right to inspect the premises under a residential tenancy agreement.

82. These assertions and actions were taken by the Commissioner with a clear understanding of the terms of the conditional termination and possession order (as recorded in the Homenet notes on 18 May 2012) and of the fact that the order had not been complied with (as recorded in the Homenet notes on

83. Over a period of almost 12 months, where there was no residential tenancy agreement in place, the Commissioner and Ms Moffatt continued to act as though there were a residential tenancy agreement in place. The Commissioner knowingly allowed Ms Moffatt to occupy the premises for use as her home and Ms Moffatt paid rent for that privilege. Rent was not merely received or accepted by a lessor, it was actively invited.

84. The Commissioner charged Ms Moffatt market rent, granted her a rebate in relation to that market rent, and accepted and processed Centrepay deduction forms in relation to the rent.

85. Further, the Commissioner corresponded with Ms Moffatt in terms that asserted the existence of a residential tenancy agreement, and exercised the right of a lessor to inspect the premises. Ms Moffatt complied with all of these requirements, to the best of her ability from time to time.

86. While it may not have been the subjective intention of either party to create a new residential tenancy agreement, it is an objective test which must be applied to the acts of the parties when determining whether an agreement is implied. On any view of these facts, the arrangement between the parties satisfies the requirements of the RTA for a residential tenancy agreement to be implied.

87. The Commissioner submitted that there was no evidence of an intention by either party to create 'new' legal relations. Section 6A of the RTA does not require any intention to create legal relations as an element of the agreement between the parties - let alone an intention to create 'new' legal relations. It is sufficient that the agreement has the features set out in subparagraphs 6A(1)(a) to (c).

88. The Commissioner further argued that even if the Commissioner had through the Commissioner's delegates purported to make an offer of a new tenancy agreement and intended it to be legally binding, the Commissioner lacked both statutory authority and capacity to do so. In this respect, the Commissioner first floated the issue of whether the employees of the Commissioner dealing with Ms Moffatt had sufficient authority or delegation to offer and enter into a new residential tenancy agreement. No evidence was presented by the Commissioner to suggest that the employees so involved were not appropriately authorised or did not possess the necessary delegation. None of the employees involved in liaising with Ms Moffatt gave evidence in the proceedings as to their actual or ostensible authority to bind the Commissioner, the functions they held a delegation for at the relevant times, or the scope of their respective roles.

89. It is not for a tenant to prove that an officer of a lessor is suitably authorised to represent the lessor in negotiations over a lease. It falls to the lessor raising this issue in proceedings to demonstrate that the officer acted without delegation, or outside of their actual authority and without ostensible authority. The Commissioner failed to bring any such evidence in this case.

90. The Commissioner also asserted that her statutory powers were limited by the public rental housing assistance program which provides that "unless the Housing Commissioner decides otherwise, an applicant is not eligible for rental housing assistance if at the time the dwelling is to be allocated the applicant owes a debt to the Commissioner". The Commissioner submitted that because Ms Moffatt at all times owed a debt to the Commissioner, she was ineligible for housing assistance in the form of a new tenancy residential tenancy agreement. The Commissioner submitted that Ms Moffatt could only have been granted a new residential tenancy agreement if the Commissioner had first considered the matter and exercised discretion in the favour of Ms Moffatt, a situation which the Commissioner asserted had not occurred. Again, there was no evidence brought by the Commissioner that such a decision had not been made by the officers involved in Ms Moffatt's case. The correspondence and actions of the Commissioner may well be interpreted as a decision by the Commissioner to allow Ms Moffatt to occupy the house, provided that the debt was repaid over time.

91. The Commissioner submitted that none of the parties' interactions indicated an understanding, much less an intention, that they were entering into a new agreement having dispensed with the previous tenancy. This is an accurate summary of the evidence. However, section 6A of the RTA does not require that the agreement of the parties be in such precise terms. Section 6A only requires an agreement to give a right to occupy the premises for use as a home in exchange for value.

92. The Commissioner also submitted that nothing communicated to the respondent by the applicant was inconsistent with the applicant proceeding to enforce the right to take action for breach of the conditional termination of possession order. This submission disregards the terms of the correspondence sent to Ms Moffatt on 5 July 2012, which referred to issuing Ms Moffatt a notice to vacate and the terms of the rental rebate letters of June and November 2012, which referred to the payment of weekly rent.

93. Finally, the Commissioner opposed the implication of a new residential tenancy agreement due to uncertainty over the time at which such agreement could be said to have commenced, referring to section 7 of the RTA. Section 7 does not raise any impediment to the implication of a residential tenancy agreement in this case. It operates to provide that residential tenancy agreement will be deemed to have commenced on the earliest of a number of possible acts. Section 7 recognises that there may not be exact congruence between the date on which the tenant occupies the premises, or the first payment of rent or the execution of a written agreement. The "agreement" as such may not be reached until sometime after one of those actions occurred, however on the reaching of agreement - including agreement by implication - the residential tenancy agreement will be deemed to have commenced on the earliest of those actions.

94. It follows that in this case, the residential tenancy agreement which is implied will, by operation of section 7, be taken to have commenced on 29 May 2012, the day Ms Moffatt took possession of the premises. Under the implied agreement, Ms Moffatt is obliged to pay rent in relation to her occupation of the premises from that time. From time to time Miss Moffatt has been granted a rebate in relation to that rent and she has failed to make payments of rent as required, leaving her at the time of the hearing some $5000 in arrears in relation to the implied tenancy.

95. The Commissioner has sought an order under section 42B of the RTA. That provision allows the tribunal to direct the registrar to issue a warrant for eviction for failure to comply with a conditional termination and possession order. I will dismiss the application, although I am satisfied that the conditional termination and possession order operated to terminate the residential tenancy agreement and the tenant continues to live at the premises. This is because I am satisfied that the tenant continues to live at the premises under a new residential tenancy agreement which is implied as a result of the conduct of the parties over a prolonged period of time.

[1] which sets out the required content of a termination and possession order.

[2] Coleman v Power [2004] HCA 39; (2004) 220 CLR 1

[3] The Community Law Reform Committee of the Australian Capital Territory,

Report No. 8 (1994), Private Residential Tenancy Law

[4] Further, the rigid formulation proposed by the Commissioner is itself no longer strictly