Hill v Katnelson (Residential Tenancies) [2025] VCAT 711

For the written reasons provided, the Tribunal orders that:

1. Elizabeth Hill ('Renter') seeks an order of compensation against the owner Nell Katsnelson ('Rental Provider') for what she says is overpaid rent from 14 January 2023 to 09 March 2024. The Renter also seeks a declaration from the Tribunal that a notice of rent increase issued to the Renter by the Rental Provider on 10 November 2022 was invalid.
2. The Renter disputes the validity of the notice of rent increase on the basis that it "did not specify the method by which the rent increase was calculated and the required documentation did not accompany the notice".
3. The application was heard over two days on 26 April 2024 and 5 August 2024, and subsequent to the hearing each party was provided with an opportunity to file further written submissions by 11 October 2024, 16 January 2025 and 15 April 2025. The Tribunal's decision was reserved on 16 April 2025 with written reasons to follow.

1. On 31 August 2020, the Renter and the Rental Provider entered into a residential rental agreement ("rental agreement") for the premises situated at 14/39 Sutherland Road, Armadale VIC 3143 ('Rented Premises'). The rental agreement was for an initial term of 12 months commencing on 14 September 2020. The rent was $1,304 per calendar month. In the absence of any evidence to the contrary, it is understood that the rental agreement became periodic from 14 September 2021. The Renter vacated the rented premises on 08 March 2024.
2. During the Renter's tenancy, the rent was charged as follows:

14 September 2020- 13 January 2023 $1,304 per calendar month

14 January 2023- 13 January 2024 $1,390 per calendar month

14 January 2024 - 9 March 2024 $1,651 per calendar month

1. The first notice of rent increase issued on 10 November 2022 ('First Notice') provides for a rent increase from $1,304 per calendar month to $1,390 per calendar month from 14 January 2023. The amount of the increase was $86 per month ('First Increase'). Clause 11 of the First Notice states the method used to calculate the First Increase to be as follows:

2. The notice was on the prescribed form which provided information to the renter about rights to challenge the increase as excessive.
3. The Renter did not seek any report from Consumer Affairs Victoria nor did she make any application to the Tribunal at that time in response to the First Notice. The Renter paid the First Increase from 14 January 2023.
4. A second notice of rent increase was issued on 3 November 2023 ('Second Notice'). The Second Notice provides for an increase of rent from $1,390 to $1,651 per calendar month from 14 January 2024. The amount of the increase was $261 per calendar month ('Second Increase'). Section 11 of the Second Notice states the method used to calculate the increase to be as follows:

1 bedroom apartments in the Armadale area and surrounds are currently being let for between $375 per week upwards. The increased rent of $380 per week is calculated using the median rent within this range for comparable properties based on the attached Market Report.

5. On 28 December 2023, the Renter wrote to the Rental Provider in response to the Second Notice. In the letter, the Renter made reference to the First Increase that took effect on 14 January 2023 and stated that they expected the second increase to be for a similar amount. The Renter expressed concern that the Second Increase would place them under financial strain and sought to negotiate a lower increase.
6. On 26 February 2024, the Renter filed an application with the Tribunal seeking an order of compensation for overpaid rent from 14 January 2023 to 13 January 2024 under section 210 of the Residential Tenancies Act 1997 (Vic) (RT Act) and an order that the First Notice was invalid. The Renter sought these orders on the basis that the Rental Provider breached section 44(3)(b) of the RT Act when giving the First Notice as the notice failed to specify the method of calculation of the rent increase and was not accompanied by "the required documentation".
7. On 13 March 2024, the Renter sought leave of the Tribunal to amend the application to include an application under section 123(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act) and sections 452(1) and 472 (1) (a) of the RT Act. The Renter did not specify the orders being sought pursuant to section 123(1) of the VCAT Act or sections 452(1) and 472(1)(a) of the RT Act.
8. On 26 April 2024, the first hearing of the proceeding was conducted and adjourned to enable each party to serve on one another and to file with the Tribunal written submissions addressing the validity of the notices of rent increase and any steps taken by either party to mitigate any potential loss arising as a result of the identification of possible issues with the validity of the notice of rent increase.
9. On 5 August 2024, the proceeding was further adjourned with written submissions to be provided by the parties of the relevance to this proceeding of the recent decision of the Tribunal in the matter of Maurer v Sia (Residential Tenancies) [2024] VCAT 571 (14 June 2024) ('Maurer v Sia') together with further submissions concerning the validity of the Second Notice and the manner in which compensation has been calculated by the Renter.
10. On 25 November 2024, I ordered the parties to make written submissions addressing the impact of the transitional provisions of the RT Act, being section 16 of Division 5 of Schedule 1 on the validity of the First Notice and Second Notice. By 15 April 2025 final submissions were received from all parties and the Tribunal's decision stood reserved with these written reasons to follow.

1. The Tribunal's position that there is no application pathway under the RT Act to seek a declaration as the substantive order is well established. This includes an application seeking a declaration that a notice of rent increase is invalid as the substantive order. In the matter of Rosewarne v Lim (Residential Tenancies) [2022] VCAT 1015, Senior Member Treble considered VCAT's power to make a declaration as to the validity of a notice to vacate. Senior Member Treble found:
   1. The application in this case, which seeks an order, determination or declaration as to the validity or effectiveness of a notice to vacate, is not a matter that gives rise to any of the specific types of orders set out in section 472 of the Act, nor is such an order one that is "ancillary" or "incidental" to other orders that could be made as a result of a renters' application challenging a notice to vacate. Accordingly, the Act does not appear to empower the Tribunal to make a declaratory order in response to an application under section 452 challenging the effectiveness of a notice to vacate on a ground specified in section 91ZZI.
   2. The renters also sought to rely on section 124 of the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act) as the basis for declaratory orders. Part 4, Division 10 of the VCAT Act sets out additional general powers VCAT can exercise in the course of a proceeding. Section 124 of the VCAT Act includes the power to make a declaration concerning any matter in a proceeding, but this power can only be exercised "instead of any orders it could make, or in addition to any orders it makes, in a proceeding". The power does not arise if a declaration is the only order sought in respect of a particular claim and there is no alternative order that could be made.
2. In Maurer v Sia, Senior Member Campana also considered the Tribunal's declaratory power in the context of a challenge to the validity of a notice of rent increase and found:
   1. I consider this restriction on a declaratory power to apply in a number of different contexts, including a challenge to the validity of a notice of rent increase.
   2. The only means by which a renter might obtain such a declaration is if the payment of rent under a rent increase, becomes the subject of a dispute, such as in an application for possession for non-payment of rent (s.91ZM) or compensation (ss. 210 or 452, 472(1)(f)). It would however be prudent for a renter to put a residential rental provider on notice as soon as practicable, about any issue related to validity.
   3. The Renter has made a compensation claim under sections 452 and 472(1)(f) of the RT Act and seeks a refund of rent paid. Central to the success of the claim is a finding or ancillary order such as a declaration that the notices of rent increase are invalid.
3. I concur with the view of Senior Members Campana and Treble in relation to the declaratory power of the Tribunal, and I find that in this proceeding the declaration sought as to the validity of the notice of rent increase may be made as an ancillary order or finding to the renter's substantive claim for compensation.
4. As the Renter's claim for compensation may only be considered if an ancillary finding can be made that the notices of rent increase are invalid, I must first consider the submissions and evidence concerning the validity of the notices of rent increase.

The First Notice, the Second Notice and the applicable law

1. At all times since the commencement of the Rental Agreement in 2020, section 44 of the RT Act has governed the requirements for rent increases and notices of rent increase.
2. In order to determine whether the First Notice and Second Notice are valid, I must first establish which version of section 44 of the RT Act applies to the rental agreement or at any relevant time in the agreement.
3. On 29 March 2021, the Residential Tenancies Amendment Act 2018 (Vic) ('RTAA') came into effect resulting in changes to various provisions of the RT Act, including, and not limited to, section 44 concerning the validity of notices of rent increase.
4. At the time the Rental Agreement was entered into between the parties on 31 August 2020, section 44 of the RT Act stated:

(1) A landlord must give a tenant at least 60 days notice in the prescribed form of a proposed rent increase.

(2) A notice of proposed rent increase under subsection (1) may only provide for one rent increase.

(3) The notice of proposed rent increase must include a statement informing the tenant of the tenant's right under section 45 to apply within 30 days after the notice is given to the Director to investigate and report on the proposed rent.

(4) A landlord under a fixed term tenancy agreement must not increase the rent before the term ends unless the agreement provides for a rent increase within the fixed term.

(4A) A landlord must not increase the rent payable under a tenancy agreement at intervals of less than 12 months.

(5) A rent increase in contravention of this section is invalid.

1. When the RTAA came into effect on 29 March 2021, section 44(3) of the RT Act was amended by section 34(3) of the RTAA so as to state:

(3) The notice of proposed rent increase must include-

(a) the amount of the rent increase; and

(b) the method by which the rent increase was calculated; and

(c) a statement informing the renter of the renters right under section 45 to apply within 30 days after the notice is given to the Director to investigate and report on the proposed rent.

1. Section 368 of the RTAA inserted a new Division 5, Schedule 1 into the RT Act from 29 March 2021 ("Division 5, Schedule 1") setting out the transitional provisions that apply as a consequence of the amendments made to the RT Act.
2. Section 16 of Division 5, Schedule 1 provides:

(1) The amendments made to sections 17, 19, 26, 26A, 27, 27A, 30, 36, 37, 38, 39, 40, 41, 42, 43, 44, 49, 50, 66 by the Residential Tenancies Amendment Act 2018 do not apply to:

(a) a fixed term tenancy agreement entered into before the commencement date of the applicable amendment until that agreement is terminated; and

(b) a periodic tenancy agreement that commenced before the commencement of the applicable amendment until that agreement is terminated.

(2) Sections 17, 19, 26, 26A, 27, 27A, 30, 36, 37, 38, 39, 40, 41, 42, 43, 44, 49, 50 and 66 as in force immediately before the applicable amendment by the Residential Tenancies Amendment Act 2018 continue to apply to-

(a) a fixed term tenancy agreement entered into before the commencement of that amendment until the end the end of that agreement; and

(b) a periodic agreement that commenced before the commencement of that agreement until the end of that agreement.

1. Section 45 of the RT Act provides that a renter may apply to the Director of Consumer Affairs Victoria (CAV) to investigate if the renter believes that the proposed rent increase set out in a notice of rent increase is excessive.
2. A renter may make an application to the Tribunal under section 46(1) of the RT Act for an order declaring the rent, or proposed rent, excessive. This application may be made regardless of whether the renter has obtained a report from CAV under section 45 of the RT Act, but if they haven't they are required to first obtain the leave of the Tribunal under section 46(3) of the RT Act.
3. Section 47 of the RT Act empowers the Tribunal to make an order declaring the rent, or proposed rent, to be excessive and setting the amount of rent that must be paid. In the event that such an order declaring the rent excessive is made by the Tribunal, a refund may also be ordered in favour of the renter for any rent that has been paid above the amount of rent set by the Tribunal.

1. The Renter relies on the following case law in bringing this application to VCAT:

(a) Boyce v Mariella Nominees Pty Ltd ATF Lorusso Family Trust (Residential Tenancies) [2023] VCAT 89 (Boyce v Mariella)

(b) Kennedy v Pan (Residential Tenancies) [2023] VCAT 529

(c) Asif v Jian Ding Property Pty Ltd (Residential Tenancies) [2023] VCAT 1042

1. The Renter filed their initial written submissions on 20 May 2024. In those submissions, the renter made reference to the decision of Boyce v Mariella on the question of whether the method of calculation used in the First Notice is sufficient. The Renter argued that in this proceeding the First Notice did not specify the method used to calculate the rent increase and did not attach the required documentation to the notice. The renter argued that due to the failure to specify the method of calculation of the rent increase, the First Notice was invalid.
2. In their further submissions dated 4 March 2025, the Renter conceded that the RTAA amendments to Section 44 of the RT Act do not apply to rental agreements in place prior to the introduction of those amendments.
3. The Renter also conceded that the requirement for the notice to include a method of calculation of the rent increase, as required from 29 March 2021, did not apply to the First Notice.
4. However, the Renter asserted that the requirement to include a method of calculation of rent increase did apply to the Second Notice, as section 44 had always, throughout the tenancy, required that the rental provider give the renter a notice of rent increase "using the prescribed form".
5. The Renter submitted that the reference to the "prescribed form" was intended to mean the version of the form in place and available on the Consumer Affairs Victoria website at the time a notice of rent increase is given. The renter claimed that there would have been an earlier version of the prescribed form available on the Consumer Affairs Victoria website if it was intended that a different "scheme" apply to rental agreements entered into prior to 29 March 2021.
6. The Renter went on to state that the prescribed form provided in Schedule 1 of the Residential Tenancies Regulations 2021 was the correct version at the time the Second Notice was given and required the rental provider to include the "method used to calculate the increase".
7. The Renter referenced the Tribunal's decision in the matter Barlow v Fedele 1175 Pn Rosebud Pty Ltd (Residential Tenancies) [2024] VCAT 64 (17 January 2024), in which the Tribunal considered the prescribed form in the context of a renter's challenge to the validity of a notice of rent increase. The Renter quoted paragraph 19, where Member Buljan found:

"..the prescribed form does two things: first, it includes its own requirements regarding the proposed rent increase, namely a statement regarding the type of method used and it then requires the rental provider to go on to explain the calculation. Secondly, it lends support to the view that Parliament intended subsection 44(3) to require sufficient "details" must be provided in the notice to show how the new rent amount has been calculated."

1. The Rental Provider submitted that at the time the First Notice was issued, the "guidelines" and the RT Act did not stipulate that the comparable properties must be attached to the notice. The Rental Provider further submitted that the VCAT online form[1] required the method of calculation to be specified, and that they complied with this requirement by stating "To bring the property to Market Value". It was unclear from the Rental Provider's submission whether the reference to "guidelines" was intended to mean the Consumer Affairs Victoria guidelines or mandatory document provisions.
2. The Rental Provider did not make any further detailed submissions concerning the impact of Section 16 of Division 5, Schedule 1 of the RT Act on the validity of the First Notice or the Second Notice.

1. I find that by virtue of the operation of section 16 of division 5 of schedule 1 of the RT Act, the amendments made to section 44 of the RT Act that came into effect on 29 March 2021 do not apply to either the First Notice or the Second Notice. The version of section 44 that is applicable to both the First Notice and the Second Notice is that which was in effect immediately prior to the amendments made on 29 March 2021, as set out in earlier in these reasons.
2. The Renter has asserted that the requirement to include a method of calculation in a notice of rent increase was not applicable to the First Notice, however it was applicable to the Second Notice. The Renter has not provided any further submission to clarify their reasoning as to why the inclusion of a method of calculation is only applicable to the Second Notice.
3. I acknowledge and concur with the Renter's submission that the version of section 44 in force prior to the amendments introduced on 29 March 2021 required the Rental Provider to use the prescribed form when giving a notice of rent increase
4. The Renter has argued that the version of the prescribed form available on the Consumer Affairs Victoria website at the time the Second Notice was given made reference to the inclusion of a "method of calculation" and that this should be taken to mean that the method of calculation must be not only included in all notices of rent increase prepared using this prescribed form, but that it be particularised in detail, regardless of the provisions of Section 16 of Division 5 of Schedule 1 of the RT Act.
5. The Tribunal refers to the recent decision of SHV v TAMS Management Company Pty Ltd (Residential Tenancies) [2025] VCAT 331 (14 April 2025) in which Member Bevan found:

..if strict compliance with the wording of the prescribed form were to prevail, it would have the effect of repealing the transitional provisions as they apply to section 44(3), or in the alternative have the effect of amending section 44(3) of the version of the Act applying to this tenancy.

It is a basic principle of law that delegated legislation can only amend or repeal a statutory provision of Parliament where it is clearly authorised to do so by an act of Parliament, usually the parent act. No such provision has been brought to my attention that would allow the executive to use the prescribed form to amend or repeal the relevant sections in the Act.[2]

1. Member Dr Hoel found in the recent decision of Leonard v G & L Sega; Family Trust (Residential Tenancies) [2025] VCAT 197 that:

"The Act does not appear to confer the Governor with the power to make regulations inconsistent with the Act (ie a so called Henry V-III clause). On this basis and in any event, the Tribunal will not construe r21 and form 5 of Schedule 1 of the Regulations so as to prevail over the clear words of item 16 of Division 5 of Schedule 1 to the Act."[3]

1. I agree with the reasoning of Members Bevan and Dr Hoel and I reject the Renter's submission in this proceeding that the words "method used to calculate the increase" in the prescribed form imposed a requirement on the Rental Provider to include detailed information in the First Notice and/or Second Notice, beyond the information provided, or that the absence of it invalidated the notice or meant the rental provider did not comply with the requirement of providing the notice in the prescribed form.
2. There has been substantive compliance with the form and as such the rental provider has met the obligation required for the notice to be in the prescribed form.
3. I find that both the First Notice and the Second Notice are valid and the Renter is not entitled to an order of compensation for overpaid rent. The rent paid by the Renter is correct and in accordance with the valid rent increases that took effect on 14 January 2023 and 14 January 2024.
4. The Renter's application is dismissed.

[1]VCAT provides an online service for both renters and rental providers to create notices, which includes a notice of rent increase in the prescribed form.

[2] SHV v TAMS Management Company Pty Ltd [2025] VCAT 331 (14 April 2025) at [42]-[43].

[3] Leonard v G &LSega; Family Trust (Residential Tenancies) [2025] VCAT 197 (4 March 2025) at [33].