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[2013] ACAT 49
ACT Civil and Administrative Tribunal
2013-07-25
Original judgment source is linked above.
"(1) Does a residential tenancy agreement under the Residential Tenancies Act 1997 (RT Act) terminate automatically on breach by the tenant of his or her obligations under a conditional termination and possession order (CTPO)?
(2) If yes, is an implied tenancy created in circumstances where, after the breach, the tenant fails to vacate the premises and continues to pay rent to the lessor?"
Issue 1: Does a residential tenancy agreement under the Residential Tenancies Act 1997 (RT Act) terminate automatically on breach by the tenant of his or her obligations under a conditional termination and possession order (CTPO)?
"(1) 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. A tenancy at law comprises rights and obligations both contractual and proprietary. Whilst the breach of a CTPO gives rise to the termination of one of these elements, final termination of the whole tenancy can only be effected by the recovery of possession to the lessor. This is triggered only by the tenant vacating the premises; whether peaceably; or forcibly by the execution of a warrant for eviction.
(2) For the reasons stated above, in circumstances where the tenant has not vacated but continues to reside in the premises, the tenancy does not come to an end. Whilst the tenant may no longer have an enforceable proprietary interest in the land, the contractual tenancy will continue until the lessor takes action to remove the tenant. The continued payment of rent by the tenant is consistent with his or her ongoing contractual obligation to pay monetary compensation, however characterised, in exchange for occupying the premises."
"42. The Tribunal can find no support in ACT Housing v K.A. for the tenant's argument that Termination and Possession Orders on Condition act as a self-executing orders (sic) in the sense that the entire relationship both proprietary and contractual between the landlord and the tenant comes to end automatically upon default by the tenant. ... The scheme of the Act [where the tenant breaches the condition in the CTPO and remains in possession] prevents the lessor from retaking possession in any manner except for as provided by section 42 [now 42A] - that is by the lessor requesting that a warrant for eviction be issued, served and executed. Thus, the entire lease is not brought to an end until there is:
43. It follows that 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 possession order on condition remain in force.
47. It is the breach by the tenant of the condition contained in the order that triggers the right of the lessor to ... use the administrative processes set out in section 42 [now 42A] ... This breached (sic) terminates the tenant's proprietary right against the rest of the world, and allows the tenant to resist eviction, except where the eviction is carried out through the procedures available in the Act."[words in square brackets inserted]
"49. If the tenant's argument was adopted, leases would ended (sic) upon the breach of every condition, whether the lessor took action or not. Suppose a tenant failed with a payment of rent as required by the termination possession order on condition; contacted the lessor and explained that they have been involved in a car accident while on the4 way to make the payment and then made the payment one day late: - on the tenant's argument the lease would have ended for breach and the acceptance by the lessor of the (one day late) payment would give rise to a new tenancy by implication. The tenant would then evade all consequences of further breach of the condition and the lessor would be required to begin the process of termination by service of notices to remedy and vacate.
51. The legislature could not have intended that a tenant through the action of breaching not only the obligations under the residential tenancy agreement, but also by breaching an order made by the Tribunal, could avoid or ignore the obligations imposed by the legislation, the tenancy agreement and the order of the Tribunal in relation to an existing tenancy, without the possibility of any further sanctions for such a breach."
".... Those sections provide, in summary, that where a conditional termination and possession order has been made by the Tribunal and the lessor satisfies the Registrar that the order remains in force and that the condition precedent to an application for a warrant has been satisfied (that the tenant has not complied with the terms of the order) then the application for a warrant will be set down for a hearing. Section 42B provides that such an application must be decided as if it were an application under section 49 for a termination and possession order. The Tribunal may make an order for the issue of a warrant of eviction, or dismiss the application and confirm the existing conditional termination and possession order, make a new conditional termination and possession order or set aside the existing conditional termination and possession order.
48. In determining whether or not to allow the application or dismiss it the Tribunal is, therefore, required to have regard to section 49 of the RT Act. This will necessarily include an exploration of issues relating to whether the tenant is reasonably likely to pay the rent that has become payable as well as any future rent as it becomes payable; ..."
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) 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.
_(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.
Clause 15 Section 42 - inserts new sections 42, 42A and 42B into the Act dealing with conditional orders. The current legislation allows a warrant of eviction to be issued by the registrar on untested assertions of the lessor about a condition precedent having been met. While the legislation attempts to avoid this result ( a tenant having received a notice from the registrar may apply to the tribunal for a stay and both parties then have an opportunity to be heard), it remains the case that the current legislation permits the tribunal to effectively delegate a core function to the registrar. Having regard to the general functions of the registrar (s. 117) and the manner in which functions are subject to direction (s.118) this delegation is undesirable. For this reason, this clause changes the procedure for eviction following a conditional order.
New section 42A - changes the procedures for dealing with a failure to comply with a conditional termination and possession order. In the new procedures the Residential Tenancies Tribunal, rather than the Registrar will consider the issue of whether the enforcement condition has been met.
New section 42B- sets out the procedure for the Residential Tenancies Tribunal hearing an application for eviction following an enforcement condition being met, the tribunal may dismiss an application or allow an application and direct the registrar to issue a warrant for eviction.
(i) to confirm that the condition precedent has been met, and,
(ii) if so, to consider the matter (as if it were an application under section 49) and either allow or dismiss the application for warrant.
Despite anything to the contrary in any territory law, a residential tenancy agreement must not terminate or be terminated other than in the following circumstances:
(a) if a fixed term agreement ends and the tenant vacates the premises on or after the end of the agreement;
(b) if a tenant notifies the lessor in the form approved under section 133 (Approved forms - Minister) for a termination notice, and vacates the premises in accordance with the notice;
(c) if the ACAT terminates an agreement under division 4.3 or division 4.4;
(d) if the ACAT makes a termination and possession order in relation to the premises that are the subject of the agreement under division 4.4 or division 4.5;
(e) if the tenant abandons the premises that are the subject of the agreement;
(f) if a person takes action in accordance with section 64;
(g) if the tenant and lessor agree in writing to terminate the agreement and the tenant vacates the premises in accordance with the agreement to terminate;
(h) if the tenant and the lessor are the same person;
(i) a party to the agreement repudiates the agreement; and
(ii) the other party accepts the repudiation; and
(i) gives the tenant 4 weeks notice to terminate the agreement; and
(ii) has given the tenant information about alternative accommodation; and
(iii) needs the premises to use as crisis accommodation for someone other than the tenant.
Issue 2: If yes [to issue 1], is an implied tenancy created in circumstances where, after the breach, the tenant fails to vacate the premises and continues to pay rent to the lessor?"[words in square brackets added]
Issue 3: If no to issue 1, what orders should the Tribunal make pursuant to section 42B of the RT Act**?**
"Tenants of the Commissioner who receive housing assistance enjoy the benefits of well maintained properties with security of tenure and income based rent assessments that are not available to those in mainstream housing. In obtaining housing assistance the recipient not only enters a tenancy agreement with its attendant obligations but also enters a social contract of mutual responsibility with the community.
It is therefore very important that Housing ACT tenants understand that they have entered into responsibilities under a residential tenancy agreement and that these responsibilities are real and enforceable law, and will be given appropriate weight by the ACAT.
When support is required to sustain a tenancy, Housing ACT encourages engagement via one of the many support and advocacy services like Welfare Rights that the ACT Government funds to assist in the achievement of the social outcome of a sustainable tenancy. In addition, Housing ACT has significant internal support services, not the least of which are Housing Managers who engage extensively with tenants.
Due to the importance of housing assistance and its limited availability there is a community expectation that where someone ceases to comply with their legal responsibilities and the social contract has broken down, the ACAT will, make decisions under applicable legislation, but also give consideration to the prior actions of Housing ACT to sustain the tenancy in question."
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
[1] Applicant's submissions, paragraph 8
[2] [2006] ACTRTT 3, paragraphs 42-52
[3] Applicant's submissions, paragraph 14
[7] Applicant's submissions, paragraph 16
[8] Explanatory Statement for the Residential Tenancies Amendment Bill 2005
[9] Applicant's submissions paragraph 18
[10] Applicant's submissions, paragraph 23
[14] Annexure G - Respondent's first submissions
[15] Commissioner for Social Housing v Canham [2012] ACAT 41, paragraphs 67 and 69
List of cases: ACT Housing
Mildwater
List of cases: ACT Housing v Mildwater [2006] ACTRTT 3
Commissioner for Social Housing v Canham [2012] ACAT 41
Mangubat & Commissioner for Social Housing in the ACT [2013] ACAT 6