1. On 31 May 2012, the Applicant lodged an application with the Tribunal seeking:
   • (a) a reimbursement of all rent paid during his tenancy at both the Melba and Macquarie houses, being the sums of $1330 and $7680 respectively;
   • (b) a refund of all utility charges paid during these residencies, being the sums of $125 and $700 respectively; and
   • (c) an order under section 83(d) of the Residential Tenancies Act 1997 (the Act) for compensation for other economic and non-economic loss sustained by reason of the Respondent's breaches. The Applicant particularised the claim as $400 for the cost of residing with his nephew following his eviction and $2,500 for non-economic loss for distress and suffering during and after the termination of the tenancies.
2. On 14 June 2012, the Respondent filed his Defence to the claim. He asserted that the agreement between the parties was an occupancy agreement and not a tenancy agreement, and that the Applicant had willingly agreed to live in the premises on the terms offered by the Respondent.
3. Mediation between the parties was undertaken by the Tribunal without result.
4. The matter was listed for hearing on 23 August 2012. Mr Emerson-Elliott of the Welfare Rights and Legal Centre appeared for the Applicant. There was no appearance by or for the Respondent. Procedural orders were made for the filing of evidence concerning:
   • (a) the rent and utility charges paid at each house;
   • (b) the extent of overcrowding in each house;
   • (c) the outcome of the criminal actions against the respondent for breach of the Public Health Act;
   • (d) the nature and extent of loss of quiet enjoyment suffered by the Applicant in each house; and
   • (e) statements of witnesses and photos relied upon.

1. On 10 August 2012, solicitors for the Applicant filed their submissions on the law and the evidential material in response to the procedural orders.
2. On 16 November 2012, the solicitors for the Applicant filed further material including statutory declarations from the Applicant and his nephew. The statutory declaration from the Applicant addressed, inter alia, the overcrowding issues. The statutory declaration from the nephew addressed the short term accommodation the Applicant took with him.
3. On 6 December 2012, the matter was again before the Tribunal. Mr Emerson-Elliott appeared for the Applicant, and the Respondent appeared in person. The Respondent had not filed and served any material in response to the procedural order. He was given an extension of time until 31 January 2013 to do so. The Respondent was also told that if he proposed to make any application for the disqualification of the presently constituted Tribunal then he should do so formally before 31 January 2013. The disqualification issue arose because the presently constituted Tribunal heard and determined a related matter of Conteh v Fan (Residential Tenancies) [2011] ACAT 45. No such application was made by the Respondent.
4. On 17 January 2013, the Respondent filed a further copy of documents he had previously filed as his Defence together with a set of photographs of both houses.
5. On 28 March 2013, the Applicant's solicitors filed and served six Certificates of Conviction of the Respondent for breaches of section 21(1)(a) and section 67(b) of the Public Health Act. One conviction related to the Melba house and two related to the Macquarie house. The second conviction in relation to the Macquarie house was for a breach of section 67(b) of the Public Health Act.
6. Section 21(1)(a) and section 67(b) of the Public Health Act respectively, read:
   1. Activity licences - offences

_(1) A person must not carry on a licensable public health risk activity unless the person - _

(a) holds an activity licence for the activity; or

(b) is a defined influential person in relation to the holder of an activity licence for the activity.

(b) allow or suffer a condition, state or activity that the person has reasonable grounds for believing to be an insanitary condition to exist on, or to emanate from, a place occupied by that person.

1. A 'licensable public health risk activity' is an activity declared under section 18 of the Public Health Act. The Minister's declaration under section 18 is annexed.
2. On 2 April 2013, the matter was before the Tribunal for final hearing. Mr Emerson-Elliott appeared for the Applicant. There was no appearance for or by the Respondent and no communication from him. The hearing proceeded ex parte.
3. At the hearing, the Applicant gave evidence that the Melba house had been converted into 9 bedrooms. He said that there were up to 14 people, including children, living in the house. In the Macquarie house there were up to 16 people, including children, living in the house. All shared the same toilet. He gave evidence in terms of his statutory declaration concerning the amount of rent and utilities paid and the inconvenience he suffered.

Is the arrangement a residential tenancy or an occupancy agreement?

1. The Respondent contends that his arrangements with the Applicant were in the nature of 'occupancy agreements' rather than residential tenancy agreements. For reasons given below nothing turns on this distinction, but the issue was raised and thus will be addressed.
2. This contention is essentially the same contention that the present Respondent made before the Tribunal in Conteh v Fan. The Tribunal's response below is an expanded form of the response given to the same contention in Conteh v Fan.
3. Tenancy agreements and occupancy agreements are both species of contractual licences under which one party obtains the right to occupy a place in return for consideration (rent). The two forms of agreement vary in the precise rights and liabilities that are conferred in the agreement. At common law, a tenancy carries with it the exclusive right to possession of premises which is the defining characteristic of a tenancy; whereas a contractual licence may, or may not, carry this right (Anforth, Christensen and Taylor, Residential Tenancies Law and Practice in NSW (5th ed, 2011) (The Federation Press)) at [2.3.7]).[1] If the contractual licence does confer an exclusive right of occupancy, then at common law it is a tenancy irrespective of the terminology used by the parties [2.3.7].
4. At common law, a tenancy or a contractual licence can both exist in respect of all or part of premises, as long as the agreement specifies the boundaries of the demised property with clarity. Strictly, a tenancy or a contractual licence is not for the use of the premise per se, but rather is in respect of the land on which the premises sits. The exclusive right of possession of the land carries with it the exclusive right to occupy and use the premises fixed to the land.
5. At common law, a tenancy can exist in respect of a limited part of premises such as the bedroom, even if the right to use other facilities in the house is to be found in a non-exclusive contractual licence [2.3.5]. This simply means that the tenancy agreement confers two distinct sets of rights.
6. The intention of the parties is a relevant consideration at common law in determining whether a tenancy, or some lesser contractual licence, exists. However, the test is an objective one and so the intention of the parties is not definitive of the characterisation of the relationship. If objectively viewed, an exclusive right of possession to part of the premises has been conferred, then a tenancy exists in respect of that part of the premises [2.3.7].
7. Tenancy agreements and occupancy agreements are both regulated by the Act. To the extent that the Act regulates various aspects of the agreements, the Act overrides the relevant common law. The Act deals with many of the issues that arise under residential tenancies and occupancy agreements, but it does not deal with all issues and, hence, the Act does not purport to be a Code on the topics.
8. The regulatory provisions in the Act differ significantly between residential tenancy agreements and occupancy agreements. In most disputes the characterisation of the agreement is a matter of fundamental importance.
9. The Act substantially confuses the relatively clear distinction between tenancies and lesser contractual licences at common law. Section 6A of the Act defines a residential tenancy agreement as one that:
   • (a) may be oral or in writing;
   • (b) is for use of premises as a home;
   • (c) may confer an exclusive or non-exclusive right to possession.

1. Paragraphs (a) and (b) immediately above are consistent with the common law, but paragraph (c) is not. On its face, paragraph (c) abrogates the core characteristic of a tenancy at law and conflates tenancies with mere contractual licences. In terms relevant to the present dispute, paragraph (c) assimilates tenancies with occupancy agreements.
2. The standard terms for residential tenancy agreements (but not for occupancy agreements) are set out in the Schedule to the Act and automatically apply to all tenancies (sections 9-11 of the Act). Standard term 3 precludes any contracting out of the standard terms.
3. Standard term 52 invokes the equivalent of the common law right to quiet enjoyment by a tenant and standard term 53 provides for the tenant's exclusive possession of the premises.
4. It may seem at first blush that the existence of standard terms 52 and 53 resolve the apparent conflict between the definition of a residential tenancy under the Act and the common law definition. However standard terms 52 and 53 only come into play after an agreement has been characterised as a residential tenancy agreement; they are rights that flow from that characterisation. The rights conferred in standard terms 52 and 53 are not the test by which the characterisation exercise is to be carried out, as would be the case at common law. Relative to the common law, the Act puts the cart before the horse.
5. Once an agreement is characterised as a residential tenancy agreement under the Act, such as to invoke the rights in standard terms 52 and 53, the conferral of those rights then operates to give the agreement the character of a tenancy agreement at common law.
6. There is an inherent circularity in the terms in which the Act is framed and the common law.
7. Section 71C of the Act defines 'occupancy agreement' in essentially the same terms as the definition of 'residential tenancy agreement'. An occupancy agreement is defined to be an agreement to occupy premises to use as a home, whether the agreement is in writing or not and whether the right conferred is exclusive or not.
8. Under this definition of 'occupancy agreement', a contract for the exclusive right of possession of a house may be characterised only as an occupancy agreement and not as residential tenancy agreement, contrary to the common law.
9. How then does the Act meaningfully differentiate between a 'residential tenancy agreement' and an 'occupancy agreement'? The only relevant difference between the definitions of a 'residential tenancy agreement' and an 'occupancy agreement' is the inclusion in the definition of an 'occupancy agreement' of section 71C(1)(d), which simply says that an occupancy agreement is an 'agreement [which] is not a residential tenancy agreement'.
10. Section 71C(1)(d) provides no guidance whatever in how to distinguish between a residential tenancy agreement and an occupancy agreement. If section 71C(1)(d) is intended to invoke the subjective intention of the parties concerning the legal character of their agreement, then again the Act is in opposition to the common law's objective approach to the same question. It would also introduce difficulty in determining what the subjective intention of each party was, and whether those subjective intentions were consistent with each other, i.e. was there in fact a meeting of minds on the question? It would run into the difficulty that most non-legal parties to agreements would probably have with little idea of the distinction that they were expected to direct their attention to.
11. What section 71C(1)(d) does suggest is that there is an order of priority between the definitions. The first question to be asked is whether an agreement between parties does or does not answer the description of a residential tenancy agreement. Only if the answer is in the negative is the further question asked as to whether the agreement answers the definition of an 'occupancy agreement'.
12. In the present case, the agreement between the Applicant and the Respondent answers the description of a residential tenancy agreement as defined in the Act. This then invokes standards terms 52 and 53 to render the residential tenancy agreement consistent with a tenancy at common law.
13. The parties chose to use the written standard form for residential tenancy agreement, which is relevant to both an objective and subjective test of the character of the agreement.

The first reason why it does not matter whether the agreement is a residential tenancy or an occupancy agreement

1. The Act confers jurisdiction on the Tribunal to hear both tenancy disputes and occupancy disputes. Hence there is no jurisdictional issue that arises from the characterisation of the agreement.
2. At common law, it is an essential term of any tenancy agreement and of any contractual licence that the party purporting to grant the right to residency in the premises, has the right at law to do so [2.13.6][2.49.1]-[2.49.3]. This usually manifests in two distinct ways:
   • (a) A person (the lessor) cannot grant a greater right than they possess ('a stream cannot rise higher than its source'). Thus a lessor cannot purport to grant a tenancy or a contractual licence for premises over which they do not have the exclusive right of possession.
   • (b) A lessor cannot purport to grant a tenancy or contractual licence in circumstances that would be contrary to the criminal and civil law of the community. A contract that is contrary to law in the sense that it calls for performance that would be unlawful, is void ab initio [2.49.2].
3. In the present case, we are concerned with the category of unlawful contracts. Purported tenancy agreements frequently arise in respect of premises for which human occupation has not been approved by the relevant regulatory authority. Generally, the relevant law makes it an offence for people to reside in such premises and for anyone to purport to lease such premises for occupation. Commonly, these cases involve unapproved garages, unapproved granny flats or unapproved renovations of warehouses etc.[2.49.3].
4. This principle finds explicit expression in prescribed term 51 of Schedule 1 of the Act which reads:
   1. The lessor guarantees that there is no legal impediment to the use of the premises for residential purposes by the tenant.

1. In accordance with clause 51, the lessor 'guarantees' that the occupation of the premises as a residence is lawful so that the tenant's quiet enjoyment of the premises will not be disturbed by force of the law. The word 'guarantee' is absolute and makes the satisfaction of this clause a matter of strict liability. Thus, the motivations of the lessor or the reasonableness of the lessor's actions are irrelevant to a consideration of whether the clause has been breached.
2. In the present case, none of the renovations to create the multiplicity of bedrooms was approved and, hence, the tenancy or occupancy of the bedrooms was unlawful.
3. There is no evidence that the Applicant knew of the unlawfulness, but the lessor had actual or constructive knowledge of it. The lessor has no rights arising under the unlawful contract. The payments made by the Applicant were made under a mistake of fact and law as a result of which they are recoverable per se from the lessor.
4. This same result follows irrespective of whether the agreement is characterised as a tenancy or a contractual licence (an occupancy agreement) because they are each void ab initio.

The second reason why it does not matter whether the agreement is a residential tenancy or an occupancy agreement

1. The reasons set out below on this issue are again an expanded form of the rationale given by the Tribunal in Conteh v Fan.
2. Even if it is assumed that the leasing of the part of the premises to the Applicant by the Respondent was not contrary to planning law, it is still the case that both the common law and the Act place limits on the standard of premises that can be the subject of a valid tenancy agreement or contractual licence.
3. The Act imposes these limits on residential tenancy agreements via standard term 54 which provides:

54(1) At the start of the tenancy, the lessor must ensure that the premises,

including furniture, fittings and appliances (unless excluded from the

1. The terms 'fit for habitation' and 'reasonable state of repair' have been the subject of consideration in the tenancy legislation of other jurisdictions, see [2.3.5][2.52.1]-[2.52.4][2.631]-[2.63.7]). The Tribunal adopts the content thereof.
2. These tests contain objective standards for what the wider community considers to be acceptable accommodation. An individual lessor and tenant cannot agree to a lesser standard. Standard term 54 is a term of the tenancy agreement and it is not open to the parties to contract out of its operation.
3. The test of habitability is a more basic test than that of a 'reasonable state of repair'. A house may be inhabitable by a tenant even though it is not in a reasonable state of repair (albeit the lessor may be in breach of contract) but once the house reaches the state of being uninhabitable then further occupation of the house is not permitted and termination of the tenancy follows (standard terms 86-87).
4. Premises are mostly found to be uninhabitable for safety reasons (e.g. the danger of electrocution, rotten floor boards), or for hygiene reasons. In these cases, laws other than tenancy laws come into play to protect the health of persons concerned. This is in essence what occurred in the present case when government agencies intervened to shut down the premises and remove the residents.
5. For present purposes, premises can be found to be uninhabitable in the absence of safety concerns. When the objective community standard approach is adopted there comes a point where the absence of basic facilities and services in a house (which may otherwise be in an acceptable state of repair) becomes unacceptable and the house is deemed uninhabitable (Finn v Finato (Tenancy) (2004) NSWCTTT 179). By way of example only, in Bremer v Jones Family Investment P/L (Tenancy) (2002) NSWCTTT 195, the Tribunal held that a house without a useable bathroom and toilet was uninhabitable.
6. A tenant's quiet enjoyment of premises can be infringed without the premises being uninhabitable, but uninhabitability will inevitably impinge on the quiet enjoyment of the premises. A loss of quiet enjoyment can arise from factors other than the loss of facilities and services, e.g. noise, sleep disturbance or excessive demands on the facilities such as 16 people sharing one toilet. The fact that the people in the house were disturbing each other, even if unintentionally, is a foreseeable and inevitable consequence of the lessor's decision to allow so many people to live in such close proximity.
7. Section 71E of the Act imposes essentially the same limitations on occupancy agreements:

(1) In considering a matter, or making a decision, under this Act in

relation to an occupancy agreement for premises, a person

must have regard to the following principles (the occupancy

_(a) an occupant is entitled to live in premises that are - _

1. The common law recognises certain terms in a contract to be fundamental terms the breach of which is sufficient to give rise to termination of the contract. In the case of contracts to occupy and reside in residential premises, the common law recognises fitness for habitability to be a fundamental term with the caveat that the lessor had notice of the factors going to uninhabitability (Northern Sandblasting P/L v Harris [1997] HCA 39).
2. It does not matter whether the agreement between the present parties is characterised as a residential tenancy agreement or an occupancy agreement. In either case, both under the Act and at common law, the unlawful nature of the contract and the uninhabitability of the premises each lead to the conclusion that the agreement was void ab initio.

1. A breach of quiet enjoyment and derogation from the grant either because of the withdrawal of services and facilities or because of the uninhabitability of the premises, is a breach of the residential tenancy agreement that is able to be compensated under section 83(d) of the Act.
2. The Tribunal adopts that which appears at [2.187.2] [2.187.5] to the effect that compensation is awardable for the distress and inconvenience arising from such breaches. There is no other manner of compensating a tenant for the loss of the primary right that the tenant bargained for under the tenancy agreement, other than a payment of money. The amount of compensation must be assessed on common law principles. The common law is no stranger to assessing compensation for distress and inconvenience (without the need for any associated personal injury). By way of example only, this task is regularly undertaken in defamation matters, discrimination matters and travel claims matters. This Tribunal and those in each of the other Australian tenancy jurisdictions have long resolved this issue in favour of the power to award such compensation.

1. What follows under this heading is an expanded form of the reasons given in Conteh v Fan (above) in response to a similar submission put in that case by the Respondent. It assumes that the relationship between the parties was one of lessor and tenant, although the same result would follow in the case of an occupancy agreement.
2. The Respondent's evidence was that he billed the residents of the house for the electricity on a pro-rata basis per bedroom.
3. It was the Applicant's evidence that he was never presented with a copy of the electricity account from ACTEWAGL and that he paid all sums requested of him by the Respondent.
4. The Respondent did not make any profit from the electricity but he did recover the whole of the bill from the tenants, including for electricity consumed in the common areas of the house over which the lessor retained the right to possession.
5. Standard terms 42, 46 and 48 of Schedule 1 deals with the issue of who pays for electricity charges:

42 The lessor is responsible for the cost of the following:

(c) services for which there is not a separate metering device so that amounts consumed during the period of the tenancy cannot be accurately decided;

(d) all services up to the time of measurement or reading at the beginning of the tenancy;

(e) all services after reading or measurement at the end of the tenancy providing the tenant has not made any use of the service after the reading.

46 The tenant is responsible for all charges associated with the

consumption of services supplied to the premises, including

1. (1) The lessor is responsible for undertaking or arranging all readings or measurement of services, other than those that are connected in the name of the tenant.

(2) The lessor must provide the tenant with an opportunity to verify readings and measurements.

1. There was no separate metering of the electricity service to the house, garage and caravan and so it was not possible to 'accurately decide' the amount of electricity consumed by each of the residents.
2. It follows from standard term 42(c) that the tenant is not contractually bound to pay the electricity costs if the agreement is a residential tenancy agreement.
3. Under the former Residential Tenancies Act 1987 (NSW), there had been some doubt as to the Tribunal's power to order the repayment of overpayments of various kinds given the equitable nature of the remedy. In a series of decisions, the majority position was that such power implicitly existed in the breadth of the powers given to the Tribunal to resolve disputes (Brodziak v Lowrey (1996) NSWRT 14; Moore and White v Lesbian Space Inc (1997) NSWRT 154; Schofield v Carroll (1997) NSWRT 138; Hopkinson v Conaught P/L (1997) NSWRT 142; Coombe v E Cocco and Sons Investments P/L (1997) NSWRT 147; Bull v Harold & Barbara Rowe t/as Shangri-La Caravan Park (1997) NSWRT 44, Deleiven v Department of Housing (1999) NSWRT 21; O'Donnell v Leppington Pastoral Co P/L (2002) NSWCTTT 371). For the contrary position see Parisi v Kosac (1996) NSWRT 75 and Van Haren v Haleblian & Cavangh (2000) NSWRT 49 where the Tribunal noted the effect of its decision would be that action to recover overpaid rent would have to be taken in the local court.
4. By way of example only, in Hogg v George Briffa t/as Ballina Palms Village (2002) NSWRT 21 the Tribunal ordered the repayment of water charges paid by a tenant in circumstances where the duty to make the payment under the former Act was upon the landlord.
5. In Jeffrey v Fitzroy Collingwood Rental Housing Association Ltd [1999] VSC 335, Harper J dealt with the case of an overpayment arising under the Rooming Houses Act 1990 (Vic) as a result of an invalid rent increase notice served by the landlord. This case did not involve a tenancy agreement. He ordered the repayment on a basis of restitution.
6. The duties imposed on lessors in the ACT are statutory in origin and any contracting out of those obligations is prohibited by the statute. If there is a statutory prohibition on the lessor receiving and retaining a payment of a particular kind, then the clearly expressed will of the legislature is the final word.
7. The issue is then whether the Act does in fact preclude the lessor from receiving payments other than those permitted by the Act, namely the utility charges.
8. Standard term 42(c) and 48 set out a scheme that is clear enough on its face, namely, that the electricity charges in the present circumstances are the lessor's cost and not the tenant's. It is not open to the parties to come to some contrary arrangement, i.e. there is no freedom to contract on this point.
9. Standard term 42(c) and 48 do not explicitly say that the lessor must not 'receive' payments for electricity and may therefore have no further effect than setting up the prima facie recoverability of the payments in a restitution claim.
10. Section 15 of the Act however is framed in terms of payments that the lessor may 'require' or 'accept':

(1) In consideration for giving a tenant a right to occupy premises, a lessor may only require or accept rent or a bond.

_(2) A lessor must not require or accept any consideration for - _

(a) agreeing to enter into, extend or renew a residential tenancy agreement; or

1. Section 15 is framed in mandatory terms. It refers to 'any consideration' received by a lessor as part of the tenancy agreement. The term 'consideration' includes the receipt of money from the tenant to defray the lessor's liability under the Act for the unmetered electricity charges.
2. Section 15(1) limits the consideration that the lessor may require or receive to the rent and the bond. No other form of consideration is permitted.
3. The legislative intention appears to be to preclude any money or other form of consideration being either required or received from a tenant other than rent and bond. This would preclude either requiring or receiving money for the lessor's electricity accounts.
4. The lessor's actions in requiring the tenant to pay the electricity charge and in receiving the payment are each unlawful actions in breach of section 15. In terms of the defences to a restitution claim, it cannot possibly be just or equitable to permit the lessor to rely upon and benefit from his unlawful action.
5. Accordingly, the Respondent has no defence to the restitution claim and is to refund the whole of the electricity charges levied on the Applicant.

1. The Applicant is entitled to a refund of all rent paid, being $9010. The Applicant is entitled to a refund of electricity charges paid, being $825.
2. The Applicant is entitled to compensation for the inconvenience and distress suffered during the entirety of the two tenancy agreements and the inconvenience arising out of the termination. A review of comparative verdicts justifies the $2500 claimed by the Applicant.
3. The Applicant claimed a further sum of $400 for the cost of staying with his nephew for food, electricity and board for two weeks. The Applicant is entitled to the cost of removals but he is not entitled to costs that would have been incurred whether he had been evicted or not. Thus food costs and the equivalent rent and electricity that he would have paid in the Respondent's premises are not losses that the Applicant has incurred. Accordingly, the claim for $400 is denied.

I hereby revoke the previous Public Health Risk (Boarding Houses) Declaration 2000

(Instrument No. 7 of 2000) and make the following declaration under the Public Health Act 1997

This declaration is the Public Health Risk (Boarding Houses)(No.2) Declaration 2000.

This declaration commences on the day this declaration is notified in the Gazette.

(a) includes a lodger, a paying guest, a temporary resident and a permanent resident at the boarding house; but

(b) does not include a member of the family of the person who manages or controls the boarding house.

boarding house means a building in which a boarder is lodged for payment.

Building includes a part of a building, a structure, part of a structure, a temporary structure and a part of a temporary structure.

4 Boarding houses - public health risk activities

(1) It is a licensable public health risk activity to manage or control a boarding house in which more than 2 boarders are lodged for payment.

(2) It is a non-licensable public health risk activity to manage or control a boarding house in which no more than 2 boarders are lodged for payment.

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

[1] Further reference to paragraphs of this same book are set out in [....] form.