MALONE & ANOR v DHINGRA & ANOR

………….……………… Senior Member P Hatami REASONS FOR DECISION

1. This application is brought by former tenants of a property in Hawker, ACT against their former landlords. In their application, the tenants seek to: (a) recover their bond of $3,080 minus the water usage charges of $66.56, being a total of $3,013.44, (b) have the lessors penalised for their failure to lodge their bond with the Office of Rental Bonds as required by section23 of the Residential Tenancies Act 1997 (RT ACT), and (c) seek to have an investigation conducted into the lessor’s alleged failure to comply with their taxation obligations.

2. The lessors have filed a counterclaim for $7,444.56 for replacement, delivery and cost of planting a new fig tree at the property.

3. The application was heard by this Tribunal on Monday 7 July 2025. Both parties appeared in person and were self-represented. The Tribunal provided the parties with oral orders and a summary of reasons at the conclusion of the hearing. These short reasons elaborate on the orders and reasons of the 7 July 2025.

Lessors’ Failure to lodge Bond with the Office of Rental Bonds 4. Section 23 of the RT Act provides that: (1) The tenant must pay the bond to the lessor. (2) Subsection (1) does not apply if the lessor and tenant agree that the tenant will deposit the bond with the Territory. (3) If the tenant pays the bond to the lessor and not to the lessor’s agent, the lessor must, before the prescribed period ends, deposit with the Territory— (a) the amount of the bond; and (b) a notice in accordance with section 25. Maximum penalty: 20 penalty units. (4) If the tenant pays the bond to the lessor’s agent, the agent must, before the prescribed period ends, deposit with the Territory— (a) the amount of the bond; and (b) a notice in accordance with section 25. Maximum penalty: 20 penalty units. (5) An offence against this section is a strict liability offence. (6) In this section: prescribed period means— (a) 2 weeks after the day the lessor receives the bond; or (b) if another period is prescribed by regulation—the prescribed period.

5. Section 3A of the RT Act provides an outline of the application of the Criminal Code to the RT Act as follows: Other legislation applies in relation to offences against this Act. Note 1 Criminal Code The Criminal Code, ch 2 applies to all offences against this Act (see Code, pt 2.1). The chapter sets out the general principles of criminal responsibility (including burdens of proof and general defences), and defines terms used for offences to which the Code applies (e.g. conduct, intention, recklessness and strict liability). Note 2 Penalty units The Legislation Act, s 133 deals with the meaning of offence penalties that are expressed in penalty units.

6. The tenancy commenced on 19 November 2023, and the tenants moved out on 17 March 2025, they received the outcome of the final inspection of the property on 19 March 2025.

7. On 21 March 2025 the lessors lodged the tenants’ bond with the ACT Office of Rental Bonds. The lessors say that the illness and subsequent death of the respondent’s father in January 2024 led to their forgetting to lodge the bond until after the tenancy had ceased. The prescribed period for lodging the bond with the 1 Office of Rental Bonds was two weeks after the lessor received the bond. The lessors lodged the bond more than 15 months after this prescribed period.

8. Failure to lodge a bond is a serious criminal offence under the RT Act carrying a 2 maximum of 20 penalty units, it is also a strict liability offence.

9. The Tribunal does not have the jurisdiction to make a finding in relation to the 3 commission of a criminal offence, nor can it impose penalty units. However, this

1 s3 (6)(a) Residential Tenancies Act 2 ss 23 and 23(5) Residential Tenancies Act 1997 3 ss76 and 83 of Residential Tenancies Act 1997 Tribunal finds that the lessors failed to lodge a bond with the office of Rental Bonds as required by section 23 of the RT Act. The Tribunal therefore directs the registrar to refer this matter to the relevant regulatory authority with a copy of these reasons.

The Bond and the Fig Tree

10. The dispute in so far as the release of the bond is concerned, relates to the removal of a fig tree from the lessor’s property by the tenants. It was common ground between the parties, following discussions at hearing, that it was a species of common fruiting fig tree. The tenants removed the fig tree from the garden at the property at some point in January 2024.

11. With their counterclaim, the respondents have submitted a photograph of the fig tree apparently taken on 18 November 2023 following pruning of the tree by the first respondent. The tree appeared in this photograph to be green and apparently healthy. The tenants took a photograph of the same tree on 22 December 2023, in this photograph the tree leaves are brown, dry and shrivelled. They emailed this photograph along with other material to the lessors on 14 January 2024.

12. The tenants say that the removal of the fig tree was necessitated by the fact that it was dead and posed a safety risk to their children. The lessors say that they were not afforded the opportunity to address any illness that may have fallen the fig tree by the tenants’ failure to report the tree’s declining condition in a timely manner.

13. The tenants say that they were not provided with an ingoing condition report upon moving into the property and that they contacted the lessor on more than one occasion to ask for an ingoing condition report. They say that when they had not received this, they prepared an email with various photographs , including a photograph of the tree, which they sent on 14 January 2024. This email and photographs were provided to the Tribunal with the application.

14. The photograph of the tree is date stamped for 22 December 2023. It shows the tree to be in a radically different condition than the photograph submitted by the respondent dated 18 November 2023. Its previously green leaves are now brown, dry and shrivelled.

15. Noting the condition of the tree, following the communication with the lessors, the first applicant said that being professionally experienced in tree management and removal, he decided to remove the tree. The applicants say that the tree was clearly dead and posed a safety risk to their children as it was losing limbs. They say that when the lessors did not take any action in relation to the dead tree they decided to remove the tree themselves, because they understood that their obligations as tenants extended to upkeep of the garden and felt that the lessors were on notice about the condition of the tree following the tenants’ email of 14 January 2024.

16. The lessors did not raise the removal of the tree with the tenants until the end of the tenancy when the final inspection was carried out on 19 March 2025.

Findings - Failure to prepare ingoing condition report

17. Section 29 of the RT Act provides that at the start of tenancy: (1) A lessor must, not later than the day after a tenant takes possession of the premises, give the tenant 2 copies of a report about the state of repair or general condition of the premises and of any goods leased with the premises (a condition report) on the day the tenant is given the report. (2) A condition report must be signed by the lessor. (3) The tenant must, within 2 weeks after receiving the copies of the condition report, return 1 copy to the lessor, either— (a) signed by the tenant; or (b) endorsed with a statement, signed by the tenant, indicating whether the tenant agrees or disagrees with the whole of the report or with specified parts of it. (4) If the tenant returns the copy signed but without further endorsement, the tenant is taken to have agreed with the whole of the condition report. (5) However, for a consecutive tenancy agreement, the lessor and tenant need not comply with this section if an original condition report or subsequent condition report exists for the premises. (6) To remove any doubt, a condition report for premises may, but need not, contain a list of items at the premises, other than goods leased with the premises. If section 29 (1) has not been complied with section 30 states that: (3) If section 29 (1) has not been complied with, evidence by the tenant about the state of repair or general condition of the premises, and of any goods leased with the premises, is evidence of that state of repair or general condition on the day the tenant took possession of the premises.

18. The ingoing condition report is a requirement of the RT Act, its purpose being to protect both parties from exactly this type of situation. Without an ingoing report and with only a photograph of the tree manually dated by the lessors as being taken on 18 November 2023, the Tribunal cannot make a finding that the tree was healthy and without issue at the commencement of the tenancy. The tenants say that they don’t have a clear recollection of the condition of the tree when they moved in but that they didn’t notice the sudden decline in the tree – rather their first impression of the tree is captured in their photograph of 22 December 2023.

19. According to section 30 (3) of the RT Act, in absence of an ingoing condition report, the tenants’ evidence about the state of repair/general condition of the premises is the evidence of the state of repair/general condition on the day the 4 tenant took possession. It follows that in the absence of an ingoing condition report, the state of the fig tree as documented by the tenants in their photograph of 22 December 2023 is deemed to be the condition of the tree at the commencement of the tenancy on 19 November 2023. The Tribunal finds that the tree was in poor health, possibly dead at the commencement of the tenancy and that the tenants actions in removing the tree after the lessor’s took no action in relation to the photograph submitted by the tenants of the dead tree, were consistent with their obligations under the RT Act.

Lessor’s claim for compensation

20. If I am wrong and the Tribunal were to accept the lessors’ evidence of the photo allegedly taken on 18 November 2023, then the speed with which the tree died is significant.

21. For the tree in the lessor’s photograph of the 18 November 2023 to have become the tree in the tenant’s photograph of 22 December 2023 suggests disease rather than neglect. The lessors noted that the tree was on the same watering system as the mandarin tree nearby and another fig tree on the property, both of which

4 s 30(3) Residential Tenancies Act 1997 remained healthy. Therefore, it is more likely than not that the tree’s demise did not occur because of the tenants’ neglect in watering the tree.

22. The lessors say that the tenants’ failure to notify them of the deteriorating condition of the tree denied them of the opportunity to attend to the tree and perhaps save it. They say that they should be compensated by the tenants for a replacement tree to be planted at the property.

23. In considering any claim for compensation the Tribunal must consider the parties’ conduct and steps taken to mitigate their loss.

Findings - Duty to mitigate

24. Section 38 of the RT Act provides that: A person who, apart from this section, would be entitled to compensation under this Act is not entitled to the compensation, or part of it, if the loss, or part of the loss, to be compensated could have been reasonably avoided.

25. The right to recover damages is always subject to the requirement that the party claiming damages (the innocent party) take reasonable steps to mitigate their loss, 5 but the onus is on the other party to show the innocent party acted unreasonably. When an innocent party is required to take steps to mitigate, the steps required 6 will not be set too high. Where there has been a failure to mitigate loss, the damages are reduced to what they would have been had the innocent party acted 7 reasonably.

26. The lessors did not provide an ingoing condition report at any point throughout the course of the tenancy. It is not setting the bar too high to say that this requirement ought to have been met by the lessors and failure to do so means that they failed to mitigate their loss in relation to maintenance issues which arose at the commencement of the tenancy. The loss of the tree may have been avoided if the tree had been declining in health in the first few weeks of the tenancy and if the ingoing condition report was issued the tenants would had had an opportunity

5 TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd [1963] HCA 57 6 Banco de Portugal v Waterlow and Sons [1932] AC 452 at [506] 7 Hasell v Bagot, Shakes & Lewis Ltd [1911] HCA 62, Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 (Karacominakis) at [187] to assess and report on any maintenance issues, including the garden, shortly after they moved in. Even when the tenants provided the lessors with a photograph of the tree with shrivelled and dry leaves on 14 January 2024, the lessors failed to take any action. It is only once the tenancy was over that the lessors apparently noticed that the tree was missing. The lessors have failed to mitigate any loss they may have suffered by the loss of the fig tree given their failure to provide the tenants with an ingoing condition report as discussed earlier and in failing to take any action in relation to the tree once they were on notice about the condition of the tree.

27. The tenants have taken all steps available to them in the circumstances to mitigate their liability in relation to the tree. They have repeatedly requested that an ingoing condition report be provided, and they have sent the lessors a photograph of the ailing tree. It would be setting the bar very high to expect anything further from the tenants. Referral for investigation in relation to tax evasion

28. In their application the tenants also seek that an investigation is conducted into the lessor’s potential failure to comply with their taxation obligations. No evidence was submitted to substantiate this allegation nor to compel the Tribunal to refer the matter for investigation. This part of the tenant’s application is dismissed. CORRECTED ORDER 1. ACT Rental Bonds on behalf of the Territory is directed to release $66.56 of the disputed sum to the lessor and the remainder to the tenant. 2. The Tribunal finds that the lessors failed to lodge the bond with the Office of Rental Bonds as required by section 23 of the Residential Tenancies Act 1997. 3. The application is otherwise dismissed. 4. The counterclaim is dismissed. DIRECTIONS 1. The registrar is directed to refer this matter with the finding at order 2 for investigation with the relevant regulatory authority. ………………………….. Senior Member P Hatami Date(s) of hearing: 07 July 2025 First Applicant: In person Second applicant: In person First Respondent: In person Second respondent: In person