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[2016] ACAT 33
ACT Civil and Administrative Tribunal
2016-04-22
Original judgment source is linked above.
MARONEY v BULLARD (Residential Tenancies) [2016] ACAT 33
Catchwords: RESIDENTIAL TENANCIES - rental bond dispute - whether tenant improvements are excused from 'make good' at end of lease - whether damage to property was fair wear and tear - difference between same state of cleanliness and same condition, fair wear and tear excepted, at end of lease
Legislation cited: Residential Tenancies Act 1997 sch 1 s 64
Cases cited: Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224
JSM Management Pty Ltd v QBE Insurance (Australia) Ltd [2011] VSC 339
Patmore & Anor v Hamilton [2014] VSC 275
Regis Property Company Ltd and Dudley [1959] AC 370
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd [2009] HCA 8; (2009) 236 CLR 272
Taylor v Webb [1937] 2 KB 283
...the remaining costs in returning the property to an acceptable as at commencement of tenancy state, taking into consideration fair wear and tear.
The reasons are that this property was vacated in a clean and repaired manner in accordance with the final inspection held on the 21 October 2015 between Ms Mandi Cousins and myself Andrew Bullard.
The lessor's agent failed to supply a written report by the final inspection date 21st of October 2015 as contractually required.
We the respondents maintain that the applicant seeks to use our bond monies to return the property to an as new condition and not used (sic) towards a capital improvement beyond what is considered to be as to fair wear and condition.
To close I wish to state that we are professional people in our 60's and very house-proud. We enjoy our furniture and furnishing and we have absolutely no intention to return a property in the condition that Property Difference state. We support these statements by emails from Mr. Gunning by reference to our character and the state of our home. My wife is an Interior Decorator and takes great pride in the presentation of our home.
there was one small hair scrap in a sink I washed that away. There was a small amount of dust in a drawer I wiped that clean.
Owner said curtain tracks should be fine, please remove patch when you leave.
(b) in substantially the same condition as the premises were in at the commencement of the tenancy agreement, fair wear and tear excepted. (emphasis added)
"The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed."
Oliver J was correct to say in Radford v De Froberville that the words "the same situation, with respect to damages, as if the contract had been performed" do not mean "as good a financial position as if the contract had been performed" (emphasis added). In some circumstances putting the innocent party into "the same situation ... as if the contract had been performed" will coincide with placing the party into the same financial situation. Thus, in the case of the supply of defective goods, the prima facie measure of damages is the difference in value between the contract goods and the goods supplied. But as Staughton LJ explained in Ruxley Electronics Ltd v Forsyth such a measure of damages seeks only to reflect the financial consequences of a notional transaction whereby the buyer sells the defective goods on the market and purchases the contract goods. The buyer is thus placed in the "same situation ... as if the contract had been performed", with the loss being the difference in market value. However, in cases where the contract is not for the sale of marketable commodities, selling the defective item and purchasing an item corresponding with the contract is not possible. In such cases, diminution in value damages will not restore the innocent party to the "same situation ... as if the contract had been performed".
"the disappointment of the plaintiff's hopes and expectations from the contract becomes a relevant consideration only so far as it is measurable either by some deterioration of the plaintiff's financial situation or by some failure to obtain an amelioration of his financial situation."
To reason otherwise is to undermine a fundamental postulate inherent in cl 2.13.
"In the present case, the respondent was entitled to have a building erected upon her land in accordance with the contract and the plans and specifications which formed part of it, and her damage is the loss which she has sustained by the failure of the appellant to perform his obligation to her. This loss cannot be measured by comparing the value of the building which has been erected with the value it would have borne if erected in accordance with the contract; her loss can, prima facie, be measured only by ascertaining the amount required to rectify the defects complained of and so give to her the equivalent of a building on her land which is substantially in accordance with the contract."
So here, the Landlord was contractually entitled to the preservation of the premises without alterations not consented to; its measure of damages is the loss sustained by the failure of the Tenant to perform that obligation; and that loss is the cost of restoring the premises to the condition in which they would have been if the obligation had not been breached.
19 The word 'wear' [in the Oxford English Dictionary] has as one of its meanings:
The process or condition of being worn or gradually reduced in bulk or impaired in quality by continued use, friction, attrition, exposure to atmospheric or other natural destructive agencies; loss or diminution of substance or deterioration of quality due to these causes.
20 The Macquarie Dictionary expresses its meaning as being:
To impair, deteriorate or consume gradually by use or any continued process
21 In turn the Oxford English Dictionary describes the meaning of the phrase 'wear and tear' as
wearing or damage due to ordinary usage; deterioration in the condition of a thing through constant use or service.
22 The Macquarie Dictionary describes the meaning of the phrase as 'diminution, decay, damage, or injury sustained by ordinary use'.
23 Black's Law Dictionar__y [8th edition 2006] also gives the primary meaning of the phrase as 'deterioration caused by ordinary use'.
24 In my opinion, the ordinary meaning of the phrase 'wear and tear' is that given as its primary meaning by both the Oxford English Dictionary and the Macquarie Dictionary, namely damage due to or sustained during ordinary usage.
25 This is because the word 'wear' is coupled with the word 'tear'. The concept unifying both words is damage caused by ordinary, as against extraordinary, events. 'Wear' is concerned with the result of usage taking place in respect of a thing. 'Tear' is concerned with the impact of ordinary natural causes such as weather upon a thing.
26 The phrase wear and tear is often used to confine the obligation of a tenant to keep premises in good repair.
Wear and tear. In the context of leases, the phrase wear and tear - a 'reduplicative phrase', as linguists call it - includes not only the action of weather but also the normal use of property. A tenant is not liable to replace a carpet that becomes dingy from normal use during the tenancy - but a spilled bottle of black ink is another matter. The phrase is usually preceded by a synonym, for good measure: normal wear and tear, reasonable wear and tear, and fair wear and tear are generally synonymous. (emphasis added)
28 The understanding of the phrase in the context of leases was elucidated by Scott LJ in Taylor v Webb:
The phrase 'wear and tear' is a very old English idiom and the clause 'fair' (or 'reasonable') 'wear and tear excepted,' has been common in leases and tenancy agreements for two or three centuries. It is, like many idiomatic expressions, complex in meaning; it implicitly refers to both cause and effect, and in each aspect it covers two classes of disrepair, (a) that brought about by the normal or ordinary operation of natural causes, such as wind and weather, in contradistinction to abnormal or extraordinary events in nature such as lightning, hurricane, flood or earthquake; and (b) that brought about by the tenant, and other persons present in or on the premises with the consent of the tenant, either unintentionally or as a normal incident of a tenant's occupation, in the course of the 'fair' (or 'reasonable') use of the premises for any of the purposes for which they were let. Sense (a), the first of the two senses covered by the phrase 'wear and tear' when used in repairing covenants, is somewhat analogous to the sense of the words when used in marine insurance. There the perils of the sea against which the policy protects are exceptional or abnormal marine events, at least in point of degree, and sufficiently so to constitute them 'accidents': and a line was drawn in old sailing-ship days between the normal damage and cutting away of sails, spars and ropes incidental to ordinary heavy weather on the one hand, which does not constitute a peril insured against, and an abnormal casualty which does; and the old law and even the old idiomatic phrase reappear in statutory guise in s 55, sub-s 2(c), of the Marine Insurance Act 1906. So in the law of landlord and tenant legal interpretation of the phrase as applied to the elements has produced a similar demarcation of degree between the normal and abnormal, the ordinary and the extraordinary; leaving a penumbral zone where a jury may wander and lawfully come to its own conclusion, a zone of 'give and take' decisions, as Willes J said in Scales v Lawrence. That the phrase 'wear and tear' includes in its scope my sense (b), namely, the tenant's user and its effect, is too plain to need argument, and is well recognized in the decided cases
29 The judgment goes on to further discuss the meaning of 'fair' in the phrase 'fair wear and tear' when used in the context of a lease. The view of the legal consequences of a conventional fair wear and tear clause in a lease articulated in Taylor v Webb was subsequently overruled in Regis Property Company Ltd and Dudley. Nevertheless, the passage I have quoted expresses the fundamental notions of wear and tear. It also directs the reader to the context of marine insurance as illustrating the relevant concept of 'tear'.
56 Alamdo says that this deterioration is not put beyond the lessee's responsibility by the "reasonable wear and tear" exception. Its contention, in summary, is that a tenant having the benefit of such an exception is not free simply to stand by and see the demised premises reduced to rack and ruin by the compounded effects of normal wear and tear - that there is a point at which the tenant must step in and put an end to the downwards slide. In this respect, Alamdo relies on a passage in the judgment of Talbot J in Haskell v Marlow [1928] 2 KB 45 which was first rejected by the Court of Appeal in Taylor v Webb [1937] 2 KB 283 but later reinstated as authoritative by the House of Lords in Regis Property Co Ltd v Dudley [1959] AC 370. The passage is as follows:
"The meaning is that the tenant (for life or years) is bound to keep the house in good repair and condition, but is not liable for what is due to reasonable wear and tear. That is to say, his obligation to keep in good repair is subject to that exception. If any want of repair is alleged and proved in fact, it lies on the tenant to show that it comes within the exception. Reasonable wear and tear means the reasonable use of the house by the tenant and the ordinary operation of natural forces. The exception of want to repair due to wear and tear must be construed as limited to what is directly due to wear and tear, reasonable conduct on the part of the tenant being assumed. It does not mean that if there is a defect originally proceeding from reasonable wear and tear the tenant is released from his obligation to keep in good repair and condition everything which it may be possible to trace ultimately to that defect. He is bound to do such repairs as may be required to prevent the consequences flowing originally from wear and tear from producing others which wear and tear would not directly 'produce'."
"For example, if a tile falls off the roof, the tenant is not liable for the immediate consequences; but, if he does nothing and in the result more and more water gets in, the roof and walls decay and ultimately the top floor, or the whole house, becomes uninhabitable, he cannot say that it is due to reasonable wear and tear, and that therefore he is not liable under his obligation to keep the house in good repair and condition. In such a case the want of repair is not in truth caused by wear and tear. Far the greater part of it is caused by the failure of the tenant to prevent what was originally caused by wear and tear from producing results altogether beyond what was so caused. On the other hand, take the gradual wearing away of a stone floor or staircase by ordinary use. This may in time produce a considerable defect in condition, but the whole of the defect is caused by reasonable wear and tear, and the tenant is not liable in respect of it."
Of very grave concern to us now is that the invoice supplied by Leigh Edwards Painting services No 3771142 is dated the 3rd of November 2015 is a manufactured invoice after the event.
This invoice is in fact a quote. It states "Painting to be carried" out on the first page And it further states on page 2 "the existing damaged walls from owner to repair are," Also "Damaged walls and skirting from tenant will cost.
This is clearly an attempt in our view that this so-called invoice has been manufactured after the event to support Property Difference's position.
(a) in substantially the same state of cleanliness, removing all the tenant's belongings and any other goods brought onto the premises during the duration of the tenancy agreement
MARONEY
BULLARD
(2009) 236 CLR 272