Eliezer v Residential Tribunal & Ors

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION McCLELLAN J FRIDAY, 19 OCTOBER 2001 30052/01 - ELIEZER v RESIDENTIAL TRIBUNAL & ORS Judgment 1 HIS HONOUR: This is an appeal by the tenant from a decision of the Residential Tribunal in relation to a dispute arising under a residential tenancy agreement which commenced in December of 1998. The tenanted premises are a two bedroom residential flat situated in Waterloo Road, Marsfield. 2 The original lease provided a term of six months. Both during the proceedings before the Tribunal and at the present the tenant continues to occupy the premises pursuant to the lease. 3 Difficulties arose because of the activities of the occupier of another flat in the same apartment. I am not aware of the precise physical configuration of the premises, but it would appear the other occupants, probably university students, conducted themselves in a way which created considerable inconvenience. Because of the physical relationship between the access to the flat occupied by the others and the tenanted premises great inconvenience was caused to the tenants. 4 The plaintiff in the proceedings before me, Supriya Eliezer, appears with her husband to submit that the Residential Tribunal made an error of law which this Court should correct. The owners of the property also appear, being Erika and Ingrid Karl. The submissions have been made by Ingrid Karl. 5 I have allowed the proceedings to take a more informal process than might normally occur, but I believe that both sides have had every opportunity to place before me every submission which they wish. The plaintiff has also provided me with a detailed written submission, for which I am grateful. 6 The Residential Tribunal records the fact that five claims were made before it. They all arise from the difficulties experienced by the plaintiff because of the activities of other occupants of the building. 7 The Tribunal member recorded the relevant facts, about which there was no dispute, in these terms: (1) the applicant entered into a residential tenancy agreement with the respondent pursuant to a residential tenancy agreement executed on 8 December 1998.

(2) from time to time from late 1999, and perhaps earlier, to the present, neighbours of the applicant have caused excessive noise, causing severe inconvenience to the applicant and her partner. The extent of the noise has been such that the applicant and her partner have not slept in their bedroom for some months, having moved their bed into the loungeroom.

(3) the excessive noise has emanated from other lots in the strata scheme, and also from common property. It has been caused by tenants of other lots, and perhaps by their associates.

(4) the noise is said to consist of loud music, shouting, television, talking on the common property until late in the evening, and barking of dogs.

(5) when the applicants took the matter to the strata managing agent, they were told that only the lot owner, that is the landlord respondent, could make an application to have the matter dealt with. 8 I should indicate that before me both sides have made allegations in relation to the relevant factual matters, extending beyond that summary. I record the fact that the factual material advanced by the parties plays no part in the decision which I must make. I am confined to considering whether or not the Residential Tribunal has erred as a matter of law and, accordingly, I have set aside the various assertions that have been made in relation to the facts and, in particular, the conduct of the respective parties. 9 The proceedings before the Tribunal proceeded pursuant to an amended claim, which sought five orders: 1. An order pursuant to s 47, Residential Tenancies Act 1987, that rent payable is excessive due to the reduction by the landlord of facilities provided with the premises. Having been unable to use either of the two bedrooms due to excessive noise outside the bedroom windows for the period March 8, 2000 to February 25, 2001, it is requested that the rent for this period be reduced by 40%.

2. An order pursuant to s 16, Residential Tenancies Act 1987, that the landlord pay $1000 as compensation for breach of their contractual obligation to provide quiet enjoyment (cl 7.2 of the agreement). This claim is for non-economic loss stemming from the breach, such as, disappointment, hardship, physical inconvenience, stress and anxiety, and time lost.

3. An order that the landlord's agent compel the body corporate, through mediation, adjudication or other means, to take steps to prevent the recurrence of the type of disturbances that have lead to this claim.

4. An order that rent be paid into the Tribunal until the landlord's agent resolves this matter with the body corporate.

5. An order that rent paid into the Tribunal be used for compensation if any is awarded by the Tribunal. 10 Complaint is made by the plaintiff that the Tribunal member did not adequately reflect an understanding of the claims made by her, in the reasons which he gave. I do not find this an attractive submission. I am satisfied that the Tribunal member understood that complaint was made about excessive noise outside the bedroom window of the tenanted premises, and that that complaint was the cause of a significant reduction in the internal amenity of the property. Accordingly, the Tribunal member, in my opinion, correctly understood that complaint was made that, because of that noise, there had been a reduction in the facilities which were available to Mr and Mrs Eliezer. Accordingly, it was submitted that the premises were less valuable to them and that, as a consequence, it was submitted that the Tribunal should make orders reflecting the damage which was said to have occurred. 11 Before me it was submitted that the Tribunal failed to correctly understand and apply s 47 of the Residential Tenancies Act 1987. That section provides as follows: "47(1) A tenant under a residential tenancy agreement may, at any time, apply to the Tribunal for an order declaring that the rent payable under a residential tenancy agreement or a proposed residential tenancy agreement for residential premises already occupied by the tenant is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the premises. (2) This section applies whether or not the goods, services or facilities are provided under the agreement or a separate contract, agreement or arrangement or were provided under a previous contract, agreement or arrangement." 12 It was submitted that, if correctly applied, the consequence would be that the rent which the tenants had been required to pay was excessive, with the consequence that, the rent being reduced, an order should have been made providing reimbursement to the plaintiff. 13 It was further submitted that the Tribunal had erred in its understanding and application of s 22 of the Residential Tenancies Act 1987. In particular, it was said that the Tribunal had not correctly interpreted and applied s 22(1)(b), which provides that: "22(1)(b) The landlord or the landlord's agent shall not interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of the tenant in using the residential premises." 14 It was submitted that in the present circumstances that subsection should be interpreted so that an obligation fell upon the landlords to take steps to bring to an end the activities of the occupants of other residential units within the building so as to allow for the comfortable enjoyment by the tenants of the tenanted premises. 15 It was submitted that the word "permits" should be given a wide meaning, embracing an obligation that the landlord take all available measures to ensure that the premises could be enjoyed without interference from the neighbours. 16 It was accepted that the obligation did not extend to occupants of properties which were not part of the same strata facility, but it was submitted that, because the owner is a member of the owners corporation, this was sufficient to raise an obligation in law requiring the landlord to take the relevant steps. In particular, it was submitted that the landlord had an obligation to demand that the owners corporation take action. 17 It was further submitted that in the circumstances of a lease provided for in a residential tenancy agreement under the Residential Tenancies Act 1987 the Court should imply a number of significant contractual obligations extending beyond the express provisions of the legislation. 18 The submission was that the parties to the tenancy agreement are bound by its express terms and also by terms which might be appropriately implied. It was submitted that, by implication, the landlord was bound to do all things necessary to enable the tenant to have the benefit of the contract, and if there was any prospect that the tenant may not have that benefit, the landlord had an obligation to do all things necessary to secure that benefit. If the landlord failed in this respect, it was submitted that the landlord had breached its contractual obligation to the tenants. 19 It was further submitted that the obligation of the landlord was to act reasonably in all the circumstances, and that the landlord had a duty of care to the tenant not to cause harm or loss to the tenant by the landlord's actions. The submission, as I understand it, was that, by failing to bring about a termination of the conduct of the strangers who interfered with the enjoyment of the tenanted unit, the landlords had failed to act reasonably and failed to honour their duty of reasonable care, which it was submitted they owed to the tenants. 20 In its reasons, the Tribunal firstly examined the effect of s 22 of the Residential Tenancies Act 1987. The Tribunal member held that it was not open to him to find that there had been a breach of s 22(1)(a) because there was no suggestion that the landlord had directly interrupted the quiet enjoyment of the tenant. 21 I did not understand a challenge to be made to that determination. However, the Tribunal went on to determine the position with respect to s 22(1)(b). The member found it was drafted in slightly wider terms than s 22(1)(a) and "proscribes the act of interfering, or causing or permitting interference, with the reasonable peace, comfort or privacy of the tenant". However, the Tribunal member held that, because it could not be concluded that the landlord had interfered or caused interference with the tenant's rights or expectations, the subsection could not operate. 22 He then considered the position in relation to the inclusion of the words "permit any interference" in the subsection. He considered the dictionary definition of the meaning of the word "permit", which includes "to allow (a person et cetera) to do something...to let something be done...to tolerate, agree to...to grant permission, allow liberty to do something". 23 He then drew attention to the consideration of the word "permit" by the High Court in Broad v Parish (1941) 64 CLR 588, where the word, admittedly in a different context, was considered, and the High Court said that it had the meaning of "an authorisation by a person who has at least a de facto control" (p 594). 24 The Tribunal member went on to conclude that because the landlords in the present case had no control over the other occupants of the building, were not the owners of the unit which they were occupying, and had no legal capacity to require them to modify their conduct, it could not be concluded that they, by any act or omission, had permitted the activity which interfered with the occupation by the plaintiffs of the premises. 25 The Tribunal concluded that the only power which the landlord might be said to have had was the right to make an approach to the owners corporation, asking that a tenant be ordered to comply with the relevant parts of the Strata Schemes Management Act 1996 and by-laws relevant to the problem. 26 The Tribunal found, and certainly no issue was taken with this conclusion in the proceedings before me, that the rights which the owners had to approach the owners corporation and ultimately the Strata Titles Board were the same as the rights which the tenants had. In other words, the statutory scheme is such that the same protection is provided for any occupant or owner of premises in a strata building. If there is a problem, they can seek redress to ensure their amenity is not unreasonably interfered with by the activities of other occupants of the building. 27 For these reasons the Tribunal concluded that, on the facts before it, it was not open to conclude that the landlord had breached s 22 of the Residential Tenancies Act 1987. 28 The Tribunal also turned attention to s 47 of the Act and concluded that the expression "goods, services or facilities provided with the premises" does not extend to matters which were not within the effective control of the landlord. 29 Attention was drawn to the discussion in Anforth, "Residential Tenancies Law and Practice New South Wales", LBC, Sydney, 1998 at 157-158, and the Tribunal member expressed the conclusion that: "A landlord who owns one lot in a strata scheme could not provide, and could not agree to provide, neighbouring flats and common property free of noisy persons." 30 The conclusion was effectively that the landlord was not required by s 47 to take steps to control or exclude noise created by strangers. It was concluded that the obligation in s 47 is limited to facilities over which the landlord has physical control. 31 The final conclusion of the Tribunal is expressed in the following terms: "It follows that, in my view, it does not lie within the power of the respondent to permit - or for that matter to forbid - actions by third party tenants. The situation might be different if the landlord was the landlord of the third party tenants. The situation in a strata scheme would be different if the tenant alleged a problem with, for example, the common property wall or floor of the premises, because the landlord is an owner in common of the common property. But that is not the case. The landlord was not responsible for the behaviour of tenants that were not the landlord's tenants in a strata scheme. The landlord in such circumstances did not, and could not, be found to have withdrawn goods, services or facilities. The duty of a landlord in such circumstances to provide quiet enjoyment and not to interfere, cause or permit interference, with a tenant's peace comfort or privacy does not extend to a duty to deal with third party tenants in the scheme..." 32 Mr Eliezer has, in a most competent and comprehensive fashion, provided me with the benefit of detailed written submissions, supplemented by extensive oral submissions. 33 It is plain that the difficulties which arose at the premises commenced after the initial six months' term provided for under the tenancy agreement. In some circumstances this may have led to the tenants' exercising their right to terminate the arrangement and withdraw from the premises. However, this was not done and Mr Eliezer, quite properly, says that his wife, who was the actual tenant under the agreement, is entitled to approach both the Tribunal and this Court for legal redress if there is an entitlement to it. He also accepts that, whatever may be the competing positions in relation to various factual matters, I can only intervene if I am satisfied that an error of law has occurred in the decision of the Tribunal. 34 As I have indicated, that error is said to be found in the interpretation by the Tribunal of the provisions of s 22 and s 47, it being indicated that if the appropriate decision had been made an order should have been made for compensation pursuant to s 16 of the Act and for a declaration and consequential orders that the rent was excessive, as provided by s 47. 35 Critical to the determination of the dispute is the approach to be taken to the obligation of the landlord under s 22(1)(b), which proscribes the landlord from interfering, or causing or permitting any interference, with the enjoyment of the premises. A similar concept is provided by s 47(1) which proscribes the landlord from reducing or withdrawing any goods, services or facilities provided with the premises. 36 In my opinion s 22 (1)(b) does not extend an obligation to the landlord to require the landlord to take steps to control the activities of the occupants of other units within a strata complex. In my opinion the obligation which falls upon the landlord is confined to matters over which the landlord has physical and legal control, but does not extend to an obligation which requires the landlord to take proceedings or other steps to control the activities of strangers. 37 With respect to s 47, I agree with the construction of the Residential Tribunal of the words "goods, services or facilities provided". In my opinion, s 47(1) is confined to the physical and other facilities, goods or services, provided within, or as part of, the tenanted property, and only if the landlord reduces or withdraws those facilities does an obligation arise. In circumstances where there has been a reduction in the quality of the amenity to be enjoyed in the tenanted premises by the actions of a third party, a complete stranger to the tenanted property, no breach of s 47(1) can occur. 38 It follows that, in my opinion, the conclusion expressed by the Residential Tribunal is correct, and no error of law is revealed. 39 With respect to the submission that the agreement must have implied into it terms which extend to an obligation upon the landlord to take steps to control the activities of strangers, I do not believe this is the case. In circumstances where the tenant has the same rights as the landlord to approach the owners corporation for its assistance, it would not be necessary to impose the suggested obligation on the landlord in order to make the tenancy agreement effective. 40 It is said by Mr Eliezer that this position is unfair to a tenant because a tenant may take proceedings to seek to control the activities of strangers and find, before those proceedings have been concluded, that the landlord has successfully terminated the tenancy. Although the position he puts is, of course, possible, it does not seem to me appropriate to allow the fact that the landlord has a right to seek to terminate the agreement to control its construction. That right, of course, can be exercised, but it is subject to the supervision of the Residential Tribunal in circumstances where the tenant takes proceedings to have such a notice terminating the tenancy, reviewed. 41 For these reasons, in my opinion, no legal error has been revealed and, accordingly, the summons is dismissed. I reserve the question of costs. oOo

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