South Australian Civil and Administrative Tribunal Act 2013 ss 39, 70

Krell v Henry [1903] 2 KB 740

Trittenheim Pty Ltd, Heaney & Heaney v H & H Gill Nominees Pty Ltd (1994) 63 SASR 434

Featherstone v Tully [2002] SASC 243; (2002) 83 SASR 302

Townsville City Council and Delfin Lend Lease Ltd v Chief Executive, Department of Main Roads [2005] 1 Qd R 77

This is an edited version of the Tribunal's statement of reasons issued pursuant to section 33 of the Intervention Orders (Prevention of Abuse) Act 2009. The protected person has been de-identified and allocated a randomly selected pseudonym for privacy reasons. Other details that may lead to the identification of the protected person may have also been anonymised or omitted. These changes do not affect the Tribunal's decision or its reasons for decision.

1. This is an application made under s 70 of the South Australian Civil and Administrative Tribunal Act 2013 for internal review of an order made by the Tribunal on 24 May 2017 (matter number 2017/SH004661). The internal review was set down for hearing on 15 June 2017. JRL did not attend due to medical reasons. Given his prior history of non-attendance, I ordered that JRL provide a medical certificate to justify his failure to attend. He provided a medical certificate on Friday 16 June 2017.
2. JRL is seeking compensation for the amount he spent on alternative accommodation for the period 31 July 2016 to 2 December 2016 and compensation for clothing purchases that were required because he was unable to access the property that he and his wife, LRH, had leased at Glengowrie.
3. For the reasons that follow, JRL's application is dismissed.

Claim for amount spent on alternative accommodation

1. The roof of the Glengowrie property was significantly damaged by a storm on 25 July 2016. There is no dispute that the damage was caused by the storm and that the property was uninhabitable for a period until the roof was repaired. However, the parties disagree as to when it was safe to move back into the property.
2. JRL made very detailed oral submissions at the internal review hearing. Unfortunately, much of what he said was not relevant to the issues in dispute or was repetitious. He moved out of the property with his wife and five children on Sunday 31 July 2016 after a builder he had met through his church advised him that the house was unsafe and he should not go back inside. On 1 August 2016 he notified the agent that the family were no longer in the property. They initially stayed with his brother in Valley View but that caused very significant overcrowding. JRL submitted that he was advised by the Tenancies Advice Service at Consumer and Business Services (CBS) that the landlord should provide equivalent alternative accommodation in the local area for his family until the rental property was habitable.
3. The agent did not provide alternative accommodation. JRL therefore organised accommodation and is seeking compensation for that outlay. He asserts that the agent had advised him that that there was no property of equivalent value available in the area. The agent would therefore return any rent paid for the period that the property was not habitable. JRL would not be required to pay rent until the property was safe to occupy. After staying with his brother he moved with his family to Payneham House (which is somehow connected with his church) where they stayed for some six weeks until 25 September 2016. He provided $2,000 for this accommodation as a gift to the owner or operator. His wife separated from him at this time and his children went with his wife. JRL stayed at Haven Inn in Glenelg before moving to Rydges Serviced Apartments on 6 October 2016 where he stayed for six weeks. He did not move back into the Glengowrie property. He did not want to break the lease on any grounds. Thus, he did not accept the offer made by the landlords on 1 September 2016 that he could terminate the tenancy without any "break lease" costs.
4. JRL stated that on 24 August 2016 he had received notification from the agent that the property could be occupied from the next day. At that time he was at the property with his builder. The roof, or part of the roof, was covered with a tarpaulin as it was still necessary to replace the tiles. He contended that he had been advised by his friend, the builder, that the Marion Council would not approve the work that had been done. For that reason, JRL decided that he would not move back into the property until he received a report confirming that the property was safe. The Council would not provide such a report to him because he was not the landlord. He pursued both the Council and the agent for a copy of the report but it was not provided.
5. JRL showed to me three short videos recorded on his phone. I described the contents to those present at the hearing. The footage was taken within the roof space of the house and depicted JRL with his acquaintance, the builder. The latter was heard to say that he did not think that the Council would approve the work that had been done as it differed from the approved plans. He indicated what he considered to be the departures from the plans.
6. I do not consider that the video evidence provides the Tribunal with any assistance. The builder did not say that the work was unsafe but simply contended that it would not be approved by the Council because of a failure to adhere to the plans. In fact, the evidence subsequently provided by the landlords and agent established that the work was approved by the Council although the Council also required that the plans should be modified to reflect the work that had actually been done.
7. JRL also asserted that he had not moved back into the property because it required maintenance in addition to the roof repairs. He contended that the property was badly damaged by termites, there were problems with the electric wiring and the house was damp and suffered from mould. If those complaints were valid they should have been the subject of a notice given by the tenants to the landlords under s 68 of the Residential Tenancies Act 1995. If the complaints were substantiated, and the landlords failed to meet their obligation to repair, the Tribunal may have made an order directing that the necessary repairs or maintenance be carried out. However, any concerns held by JRL about these issues did not provide a justification for his failure to reoccupy the property. Moreover, his contentions about the state of the property are inconsistent with other evidence referred to in [16] below. That evidence clearly indicates that any defects were relatively minor and did not render the house unfit for human habitation.
8. JRL also contended that he had not moved back into the house because the Housing Improvement Branch had issued notices under the Housing Improvement Act 1940 and he continued to be worried about the structure. Nevertheless, he had continued to pay the rent because he had received advice from a friend that to have a cause of action at law he needed to continue paying rent. He did not want to terminate the tenancy at any stage. His lack of communication with the agents in September 2016 was caused by his email being corrupted.
9. Ms Kareta stated that the house was uninhabitable from 31 July 2016 to 25 August 2016, while the emergency repairs were undertaken. The property became habitable on 26 August 2016, being the day after the structural engineer had confirmed that the roof had been properly repaired. The tenants were not charged rent from 31 July 2016 to 25 August 2016 nor were they charged for one further week. Ms Kareta provided a copy of an email message from the Senior Development Officer at the Council dated 26 August 2016 stating that he had inspected the roof repairs for compliance. He would approve the repairs upon receipt of an amended plan.
10. Ms Kareta also stated that on 1 September 2016 the agent had sent an email to both JRL and LRH requesting that they either move back in to the house and continue paying rent or break the lease. If they chose to end the tenancy the landlord would not pursue break lease costs. There was no response from the tenants. In fact, the agent had not had any communication from the tenants between 16 September and 28 September 2016. However, I note that rent was paid for the period from 31 August to 11 October 2016.
11. On 30 September 2016 LRH telephoned the agents and advised that she wanted to break the lease. The agents agreed a settlement with LRH and the bond was released.
12. Ms Kareta submitted that as a joint tenant LRH had accepted the offer of early termination without penalty that was made in the email message dated 1 September 2016. The rent record shows that JRL did not pay rent during the period that the house was uninhabitable. In Ms Kareta's view, JRL had accepted the agent's offer that he was not required to pay rent during that period.
13. Mrs Williams gave evidence in relation to the notices under the Housing Improvement Act. She stated that a Mr Neville had attended from the Housing Improvement Branch and had issued two notices. The notices were merely preliminary notices. They did not state that the house was unfit for habitation and nor was the rent made subject to control. The preliminary notices merely required that certain minor repairs must be carried out or further action may be taken. The defects were fixed and the Housing Improvement Branch returned in January 2017 to confirm that the work had been done. That was the end of the matter.
14. Mrs Williams also gave evidence suggesting that the property was occupied during November 2016. When she conducted a routine inspection on 2 November 2016 the power and some lights were turned on and there was food in the fridge.
15. As there is an intervention order in force protecting her from contact by her husband, LRH gave evidence by telephone. She stated that she had received the email message dated 1 September 2016 from the agent and had wanted to break the lease. At that time she was still living with JRL. Although she wanted to end the lease she did not take any immediate action to do so because JRL was adamant he did not want to break the lease. She had not moved back into the property at any time but had returned to retrieve possessions.

1. The issue that the Tribunal must determine in relation to JRL's claim for compensation for accommodation expenses is not whether the money was spent but whether the landlords are liable to compensate him for the expenses incurred.
2. It is not necessary for me to decide whether or not JRL received the advice that he claims to have received from CBS. That is because the Tribunal is not bound by advice provided by CBS. Nevertheless, for the reasons that follow, the advice JRL claims to have received is not correct. For that reason I direct that a copy of my reasons should be provided to the Commissioner of Business and Consumer Affairs so that he may ensure that his officers do not provide advice in the terms alleged by JRL.[1]
3. The effect of a tenancy agreement is that the landlord agrees that the tenant may reside in the property identified in the agreement after promising to pay rent (and usually also water supply and usage charges) and to provide money as a bond. It is not an agreement whereby the landlord promises to provide accommodation, whether at the specified location or elsewhere, for the term of the tenancy. Accordingly, once the house became uninhabitable, there was no obligation placed upon the landlords to provide alternative accommodation.
4. There is no dispute that the damage to the roof was caused by an extreme weather event that could not be foreseen or guarded against. Reports published in the Advertiser and by the ABC on 26 July 2016 indicate that Adelaide suffered a severe storm on 25 July 2016 and that storm damage was particularly acute in the Somerton Park area (quite close to Glengowrie).[2] There is no evidence to suggest any breach by the landlords of their obligations to keep the roof of the property in an appropriate state of repair. Thus, it is accepted by all parties that the damage was not the fault of either the landlord or the tenant.
5. Section 83B of the Residential Tenancies Act provides that a landlord may give notice that a tenancy agreement is immediately terminated because the premises, or a substantial portion of the premises, have been destroyed or rendered uninhabitable. That provision, in part, reflects the common law principle that the occurrence of an unforeseen event which results in it being impossible to perform a contract in the manner contemplated by the parties at the time they entered their agreement may result in the contract being automatically discharged under the doctrine of frustration. Section 83B differs from the common law doctrine of frustration by requiring the giving of notice. At common law a contract terminates at the instant that a frustrating event occurs without there being any need to give notice.[3] It is unnecessary to decide in the circumstances of this case whether s 83B has modified the common law principles and, if so, to what extent.
6. The situation here is quite different from that ordinarily encountered where a contract is said to be frustrated. The property could not be occupied for a period of several weeks but once it was repaired to the satisfaction of the Council it could again be occupied. The offer made by the landlords to bring the tenancy to an early end occurred after the property again became inhabitable. Thus, the offer could not constitute notice under s 83B and nor did it purport to be such notice. I regard the offer as being a generous action on the part of the landlords to try to resolve the dispute with JRL.
7. I expressed the view at the hearing that the tenancy agreement had been temporarily frustrated. For the period that the house was uninhabitable the temporary frustration of the contract removed the obligation of the tenants to pay rent and also the obligation of the landlords to provide accommodation. On further consideration, I do not consider that analysis to be correct.
8. As I have said, the common law principle of frustration operates to terminate a contract automatically. The common law does not recognise temporary frustration of a contract. Section 39(1)(c) of the South Australian Civil and Administrative Tribunal Act 1993 requires the Tribunal to act according to equity, good conscience and the substantial merits of the case and without regard to legal technicalities and forms. The question therefore arises as to whether s 39(1)(c) permits the Tribunal to depart from the strict limits of the common law doctrine of frustration.
9. The verbal formula found in s 39(1)(c) commonly appears in statutes governing the operation of tribunals and some inferior courts. Olsson J observed in Trittenheim Pty Ltd, Heaney & Heaney v H & H Gill Nominees Pty Ltd (1994) 63 SASR 434 at 442 that the "equity, good conscience and the substantial merits of the case" formula may, in certain types of case, permit a court "... to adopt a broad approach of common sense and common fairness, eschewing all legal or other technicality."
10. In Featherstone v Tully [2002] SASC 243; (2002) 83 SASR 302 the Full Court of the Supreme Court of South Australia considered the operation of s 103 of the Electoral Act 1985, which is worded similarly to s 39(1)(c) of the SACAT Act_._ Bleby J (with Mullighan J agreeing) held at [157 - 158]:

... the court must exercise its judgment according to its good conscience and according to what it considers to be the substantial merits of the case as to whether the respective common law or statutory criteria have been met. It permits resort to a common sense judgement in all the circumstances. However, the court's judgment cannot be merely arbitrary. It must still apply the common law principles. ...

The section therefore has a useful function, but it does not, as was suggested in the course of the petitioner's argument, allow the court to create new law.

1. In Townsville City Council and Delfin Lend Lease Ltd v Chief Executive, Department of Main Roads [2005] QCA 226; [2006] 1 Qd R 77 Keane JA (as his Honour then was) held at [43] (with McMurdo P and White J agreeing) that:

The authorities suggest that a statutory obligation to have regard to the "substantial merits of the case" means that the merits may not be able to trump a countervailing rule of law but that they are one factor that must be taken into account when exercising a discretion.

1. I am bound by the decision of the Full Court in Featherstone v Tully. That decision is consistent with the view of the Queensland Court of Appeal in the Townsville City Council case. Thus, the effect of the authorities is that the equity, good conscience and substantial merits formula requires that any relevant judicial discretions must be exercised flexibly so as to do justice between the parties in accordance with the substantial merits of the case. However, the statutory formula does not authorise departure from relevant common law principles and statutory provisions or from the terms of a valid contract. The only additional observation I would make is that the statutory formula arguably operates to confer an equitable jurisdiction on the Tribunal that it would not otherwise have.
2. In this light I do not consider that the equity, good conscience and substantial merits principle permits me to depart from the common law principles governing frustration of contracts so as to find that there was a temporary frustration while the property remained uninhabitable. Accordingly, the decisive issue is whether I can or should exercise the discretion conferred upon the Tribunal under s 110(1)(c) of the Residential Tenancies Act to award compensation to JRL. I have already noted that there is no evidence which indicates that the landlords had failed to meet their obligations under s 68 of the Residential Tenancies Act to keep the property in a reasonable state of repair.
3. I am also satisfied that the landlords acted with reasonable diligence to have the necessary repairs carried out as required by s 68. The damage to the roof was clearly substantial and, as the video provided by JRL demonstrates, it required not only the relaying of the tiles but also significant repairs to the framework of the roof. In my view the landlords were very diligent in ensuring that the necessary repairs were carried out in less than four weeks, particularly at a time when there may have been substantial demand upon builders to conduct similar repairs due to the apparently widespread storm damage. The work also required the preparation of a plan and its submission to and approval by the Council. Planning obligations are often a cause of delay.
4. Because there was no breach of the tenancy agreement or of the Residential Tenancies Act there is no basis upon which I could order the payment of compensation. The essential preconditions to the exercise of the power to award compensation under s 110(1)(c) have not been satisfied. I must therefore dismiss the claim for compensation based upon the cost of alternative accommodation.
5. I also take the opportunity to note that I consider the claim made by JRL for alternative accommodation at Rydges to be grossly excessive. He stayed in a serviced apartment for almost six weeks in the period from 7 October 2017 to 16 November 2016. He incurred a total bill of $12,218.49. The nightly accommodation charge ranged from $197 to $368. He also incurred very substantial costs for meals (in one instance the cost of a meal was $211), telephone calls (on one occasion the call fee was $104), very regular use of the minibar (for non-alcoholic beverages), gratuities (up to $50) and parking. Even if the landlords were liable to meet the cost of alternative accommodation (which is not the case) the claim made by JRL manifestly exceeds what could properly be the subject of an order for compensation. I also note that the alternative accommodation claimed by JRL relates to a period well after the house again became inhabitable. In summary, there is no basis in law or fact for JRL's claim for compensation for alternative housing expenses and additionally the amount claimed was manifestly excessive.
6. JRL has referred to other concerns he held about the condition of the house. I have already observed that he did not request that repairs be undertaken pursuant to s 68 of the Residential Tenancies Act. Leaving that aside, to the extent that his concerns had any proper basis, they were addressed by the Housing Improvement Act notices. These were not matters that required occupation of the property to cease. The only evidence is that the notices did no more than require that certain defects in the property be rectified. This happened after JRL ceased occupation.

1. JRL is claiming compensation for money spent on clothes in the time immediately following the storm damage. He asserts that on 31 July 2016, when the builder advised he should not enter the house as it was unsafe, his family were left with only the clothes they were wearing. He contacted the agent saying he needed access to retrieve clothing but that was not facilitated. Ms Kareta submitted that the builder was willing to allow JRL to return briefly to collect clothing and the like provided that there was not a strong wind.
2. The oral evidence of LRH was that she had to buy essentials clothing such as underwear, socks and track pants in the days following 31 July 2017. No evidence has been provided as to the extent of this expenditure. The children's school provided spare uniforms for the children.
3. The landlords were not liable for loss arising from the storm damage to the property. Moreover, even if the landlords were liable, I would hesitate to order compensation for the full value of the replacement clothing as the tenants continue to have the benefit of the additional items.

1. [1] I make no finding as to whether advice was given in the terms alleged by JRL.
2. [2] Section 39(1)(d) of the South Australian Civil and Administrative Tribunal Act 2013 empowers the Tribunal to inform itself as it thinks fit.
3. [3] Krell v Henry [1903] 2 KB 740.