1. The lessor did not make any application to the Tribunal prior to the order expiring on 19 February 2013. The respondent gave uncontested evidence that since the termination of the tenancy on 26 September 2012 the lessor has solicited rent payment from the respondent, invited the respondent to fill out rental rebate forms, asserted their right to inspect the property under the residential tenancy agreement and sent other correspondence concerning the tenancy to the respondent. The respondent has provided information to the lessor in relation to income for the purpose of calculating rental rebate.
2. Documents dated 3 December 2012, in which Mr William Pesi is described by the applicant as a tenant and as currently being on full rent were provided by the applicant. The evidence supports the conclusion that soon after the termination of the tenancy by reason of the tenant's breach of the conditional termination possession order, the applicant lessor was taking steps to calculate rental rebate. The calculation of rental rebate is clearly referable to the existence of a residential tenancy agreement.
3. The current application pursuant to section 49 of the Act is based upon a Notice to Remedy for arrears served on 5 August 2013 and a Notice to Vacate for arrears served on 4 September 2013. The service of such notices point to the relationship between the parties being one of lessor and tenant. The residential tenancy terms regulate the termination of a tenancy by a lessor for the tenant's failure to pay rent at clause 92 which provides as follows: the tribunal may order the termination of the tenancy and eviction of the tenant on the ground of non-payment of rent in the following circumstances (1) the lessor has served a notice to remedy on the tenant for the failure to pay rent and (2) the lessor has served a notice to vacate. The notice was served by the applicant lessor purporting to be notices served pursuant to their rights are set out in clause 92. Again such conduct points to the existence of a residential tenancy agreement between the parties.
4. Taking into account the conduct of the parties, correspondence between the parties and the amount of time that has passed since the tenancy terminated on 26 September 2012, the Tribunal determines that a residential tenancy agreement arose by implication from the conduct of the parties at some time after 26 September 2012. Although the Tribunal acknowledges that it would not have been possible on 26 or 27 September 2012 to imply a residential tenancy agreement, the subsequent conduct of the parties when viewed from the 'retrospective' perspective described in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd, allows the Tribunal to set the commencement date for the implied tenancy at 27 November 2012. Thus, rent is payable by the tenant under the implied tenancy from 27 November 2012.
5. The rental schedule provided by the applicant is relied upon for the calculation of the arrears of rent, from time to time. As at 27 November 2012 the arrears are set to zero. On 5 August 2013 the arrears were $2971.30; the Notice to Remedy served on that date states that "Our records show that as at 5 August 2013 you are $10,141.04 DR behind in your rent. To be two weeks in advance, you must also pay $121. This makes a total due of $10,262.04". The Notice to Remedy served by the applicant requires the tenant to remedy a breach of the residential tenancy agreement by the payment of $10,262.04 within seven days of the date of service of the notice.
6. On or about 4 September 2013 the rental arrears were $2953.70. The Notice to Vacate served on for September 2013, stated that "your rent account is in arrears by $10,062.54 DR as at Saturday, 31 August 2013".
7. There are very few decisions in relation to residential tenancies which deal with the purpose of notices to remedy or the circumstances under which the Tribunal should exercise its power to correct a defect in a notice. Section 83 of the Act provides that the Tribunal may make an order in relation to an application about a tenancy dispute correcting a defect in a notice or in the service of the notice.
8. In Ryan v ACT Housing [2003] ACTRTT 2, the Tribunal determined that in considering whether to correct a defect in a notice, the effect of the correction upon the tenant should be considered. In St Jude's Family Support Service v Myers [2005] ACTRTT 15 Member Anforth, referring to the decision in Ryan v ACT Housing stated at paragraph 8 that:

the implication is that correction should only take place where the tenant suffers little or no loss as a result. Certainly this is a proposition which sits comfortably with the power dynamic within this particular lessor/tenant relationship - the lessor, being a government-funded organisation with greater resources than the individual tenant who is in serious personal crisis, has a responsibility to ensure that it adheres to the law when it wishes to take steps which would be detrimental to the tenant.

The Tribunal should consider the effect of any correction to a notice upon the tenant: In this case, as in St Jude's Family Support Service v Myers, any correction would assist an otherwise far from perfect attempt to terminate the residential tenancy agreement, resulting in potential homelessness for the respondent tenant.

1. This approach accords with section 59 of the Act which provides that where a lessor has served a termination notice which is not in the form approved under the Act, and the tenant does not vacate the premises, the lessor may apply to ACAT for a waiver of the defect in the notice, or in the service of the notice, and for the making of a termination and possession order. Section 53(2) provides that the Tribunal must not waive a defect and make a termination and possession order unless satisfied that the defect did not, and is not likely to, place the tenant in a significantly worse position than the tenant would have been in had the notice been in, and served in, accordance with the standard residential tenancy terms.
2. In oral submissions the applicant asserted that if the Tribunal corrected the defect in the notice, there would be no prejudice to the tenant, as on any calculation the arrears are significant and the rent schedule shows that the tenant has failed to pay rent in accordance with his obligation pursuant to the residential tenancy agreement. In written submissions the applicant stated that the final calculation of the amount does not speak to the validity of a notice to remedy and notice to vacate issued pursuant to clause 92 of the standard terms. The applicant asserts that there is no dispute that the respondent owes money to the applicant for failure to pay rent and rental arrears - the failure to pay rent is the ground on which the applicant relied to issue the notice to remedy and the notice to vacate.
3. The service of a notice to remedy is a necessary step for a lessor seeking to terminate a residential tenancy agreement where the breach is the tenant's failure to pay rent. A lessor is not entitled to issue a notice to vacate unless they have served a notice to remedy, and the tenant has failed to remedy. Clause 92 of the residential tenancy agreement provides that the Tribunal may order the termination of the tenancy and the eviction of the tenant on the ground of non-payment of rent in the following circumstances:

(a) rent has been unpaid for 1 week. The first day of this period concludes at midnight on the day when the unpaid rent was due;

_(b) the lessor has served a notice to remedy on the tenant for the failure to pay the rent, being a notice - _

(i) served not earlier than 1 week after the day when the rent was due; and

(ii) containing a statement that if the tenant pays the rent outstanding to the date of payment within 7 days of the date of service of the notice to remedy, no further action must be taken and the tenancy continues;

(c) if all rent is not paid within 1 week of the date of service of the notice to remedy - the lessor may then serve a notice to vacate on the tenant requiring the tenant to vacate the premises within 2 weeks of service of the notice to vacate;

1. Section 49 of the Act provides that on application by a lessor, the ACAT may make a termination and possession order if:

(a) the tenant has failed to pay rent that has become payable under the residential tenancy agreement; and

(b) the lessor has served a termination notice on the tenant on the basis of the failure to pay rent; and

(c) the tenant has not vacated the premises in accordance with the notice.

1. If the Tribunal should find that either the notice to remedy or the notice to vacate is invalid then the lessor's application for termination cannot succeed. Where both a notice to remedy and a failure by the tenant to remedy are conditions precedent to the issuing of a notice to vacate, then the Tribunal must consider the purpose of the notice to remedy. In relation to leases generally, the common law provides that the notice should give the tenant accurate information as to the breach alleged by the lessor and what action will be necessary by the tenant to remedy the breach. The tenant should have the opportunity of determining whether or not the breach is admitted and, where the breach is capable of being remedied, the tenant should have the opportunity to remedy.[5] If a notice to remedy, or a notice to vacate served upon the tenant contains a defect which could readily mislead the tenant about an essential element of the breach that had to be remedied, so that the decision as to what action they should take is influenced by the defective information, then taking into account the serious consequences (potential homelessness) for the tenant, the Tribunal should be extremely cautious about correcting a defect in relation to the quantum of arrears, said to be owed by the tenant.[6]
2. In the present case the Tribunal notes:
   • (a) that the tenant has frequently failed to pay rent in accordance with the residential tenancy agreement;
   • (b) that no accurate rental schedule has been provided by the applicant, and so the amounts in relation to rent payable under the implied tenancy have been calculated by the Tribunal based on the information before it. This rental amount should be seen as an approximation;
   • (c) the Notice to Remedy served on 5 August 2013 contains an error with regard to the amount of rental arrears owed by the tenant;
   • (d) that error is by a factor of three: so the tenant is asked to remedy by paying $10,141.04 within seven days of the service of the notice whereas the arrears which have arisen under the implied tenancy are in the vicinity of $2,971.30;
   • (e) that error would have a significant impact upon the actions of the tenant: the tenant may have been able to take steps to remedy an amount of arrears less than $3000, but may have viewed the payment of an amount in excess of $10,000 as not possible; and
   • (f) an application for termination and possession made in circumstances in which the arrears owed are significant, may result in termination of the residential tenancy agreement and homelessness for the tenant and his family.
3. The Tribunal has determined that it is not appropriate to correct the defect as to the quantum of arrears in either the Notice to Remedy or the Notice to Vacate. It is a pre-requisite for an application for termination and possession that the lessor has served valid notices in accordance with the requirements of the residential tenancy agreement and the Act. The Tribunal finds that the lessor's Notice to Remedy and Notice to Vacate are defective, and therefore their application must fail.

Residential Tenancies Act 1997

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.

(1) On application by a lessor, the ACAT may make a termination and possession order if -

(a) the tenant has failed to pay rent that has become payable under the residential tenancy agreement; and

(b) the lessor has served a termination notice on the tenant on the basis of the failure to pay rent; and

(c) the tenant has not vacated the premises in accordance with the notice.

(2) If a lessor has made an application under subsection (1), the ACAT may refuse to make a termination and possession order if -

(a) the tenant has paid any rent that has become payable and is, in the ACAT's opinion, reasonably likely to pay future rent as it becomes payable; and

(b) the ACAT considers it just and appropriate to do so.

(a) the tenant is, in the ACAT's opinion, reasonably likely to pay the rent that has become payable as well as pay future rent as it becomes payable; and

(b) the tenant agrees to pay the rent that has become payable, and undertakes to pay future rent as it becomes payable, as required by the ACAT.

(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.

(a) the ACAT makes an order under subsection (1); and

(i) were the order not suspended for a specified period of no more than 3 weeks the tenant would suffer significant hardship; and

(ii) that hardship would be greater than the hardship that would be suffered by the lessor if the order were suspended for the specified period;

the ACAT may suspend the operation of the termination and possession order for a specified period of no more than 3 weeks.

[1] Section 49 (1) of the Act

[3] For example, the National Security (Lessor and Tenant) Regulations (Cth) and State legislation is in similar terms such as the Lessor and Tenant Amendment Act 1948 (NSW) (NSW Act)

[4] See section 8 of the Residential Tenancies Act 1997

[5] See for a discussion of this area of the law Sharon Christensen and Bill Duncan, Breaches of the lease 'capable of remedy': A technical or practical approach? Australian Property Law Journal 13 (2): 204

[6] This approach is analogous to that taken by the High Court in relation to defects in a bankruptcy notice in Adams v Lambert [2006] HCA 10. Both bankruptcy proceedings and applications to terminate tenancies have serious consequences for the parties concerned