S & L Carney over a house at 47 Waller Crescent Campbell in the ACT. The house was a large one, with 4 bedrooms, the appropriate formal and informal living areas and a pool. The commencing rent was $1,000 per week, payable fortnightly in advance. 2. The lease was the standard ACT lease, with a number of endorsed clauses and an "Armed Forces Clause" included. 3. The tenancy commenced on 12th February 2008. So much is not in dispute. 4. The dispute (see infra) was filed in ACAT on 4th November 2009, and served upon the lessors by ACAT the same day. A hearing was set for

1st December 2009 5. On 1st December 2009 the applicant tenants appeared before Senior Member Lennard, but the respondent lessors did not. Accordingly, an ex parte judgement was entered by the Senior Member. 6. However, the lessors filed an application to have this decision set aside, stating that they had not received the originating application. This came before me as a motion on 11th January 2010, and I set the decision of Senior Member Lennard aside and made directions for the hearing. 7. The matter was heard on 22nd March 2010, and adjourned for decision, noting that the parties could file any further submissions that they wished to do with market rent of similar properties prior to 30th April 2010.

1. The application of the tenants, filed 26th October 2009, is for compensation from the lessors for a number of items set out succinctly and clearly based upon alleged misfeasance or omission by the lessors. They are

1. damages for reduced utility of the property due to lack of maintenance and negligence as a lessors; 2. reimbursement for works undertaken by the tenants:

1. refund of excess rent due to inaccurate CPI calculations on rent increases; and

1. reimbursement of rent due to loss of utility due to flood damage.
2. A total of $9,873.15 itemised and quantified in the pleadings is sought as compensation.
3. The tenants allege that a lack of maintenance at the property led to the lower floor being flooded on three separate occasions, causing damage to their possessions. The flooding also caused significant work in cleaning up after the water ingress, costs being incurred in carpet drying and machinery hire.
4. It is alleged that the lessors clearly knew of the flood risk, but that no action was taken to prevent a recurrence.
5. The tenants also allege that maintenance issues raised with the lessors were addressed neither completely nor in a timely manner. These included, inter alia, front door security, a gas leak, a broken toilet cistern, broken steps and a failure to comply with legal requirements in respect of the pool fencing (or rather the lack of same).
6. Compensation, then, is sought for the "reduced utility of the property" during the tenancy.

1. The lessors filed material in this matter on 1st February 2010, shortly after becoming aware that the original decision had been set aside. The gist of their defence is that as lessors they did everything they reasonably could to address maintenance claims, and that the tenants had taken the property in full knowledge and understanding of the property's condition.
2. The lessors also make the point - though they do not seek any damages by way of counterclaim in respect thereof - that the tenants were occasionally in breach of their obligations regarding rent payments and costs, and parking of vehicles contrary to the terms of the agreement.
3. The lease had been negotiated for a 5 year period, but was ultimately terminated by the tenants when they obtained defence housing. The lessors felt that in the light of these events, the intention to hold the property for 5 years "was misleading".

1. The tenants note that the property was advertised as an "executive residence". More saliently, they allege that they were promised by the lessors that "key maintenance tasks would be undertaken". They were not, but it appears that the reason for that lay partially at least with the difficulties faced by the lessors in obtaining service people to do the work.
2. The tenants in submissions and in presentation argued that the lessors' choice not to engage a real estate manager to look after the property and the tenants' requirements constituted negligence for which the tenants should be recompensed. The tenant cited having to write letters to assert their rights, and to do the research necessary to write those letters as a burden caused by this decision of the lessors.
3. I am not at all convinced by this argument. In the first place, it is no responsibility of the tenant to tell the lessor how to conduct his business. If the lessor chooses to do it himself, under the law as it stands presently, he may.
4. And in the second place, that was the situation when the tenants took the property. It was not as though there was any change in the status quo that the tenants could rely upon to found a grievance.
5. In the third place, and possibly most saliently, there is neither presumption nor fact that agents are a repository of wisdom and a font of knowledge. It is up to the tenants to "second-guess" - or at least to guard their interests by inquiry and through knowledge of their rights as necessary in respect of any decisions actions or lack thereof made by an agent in no lesser measure than of those made by an owner.
6. Having said that, a choice to self-manage does not excuse the lessors from being appropriate in their management of the property and reacting in a timely and competent manner to the tenants' valid needs.
7. In approaching the next section, it is useful to look at the legislation. Section 71 of the Residential Tenancies Act 1997 (ACT) ("the act") sets out the law governing the area of compensating a tenant for diminution of utility or enjoyment by a lessor. I set it out in full here:

(1) On application by a tenant, the ACAT must order a reduction in the rental rate payable under a residential tenancy agreement if it considers that the tenant's use or enjoyment of the premises has diminished significantly as a result of any of the following:

(a) the loss or diminished utility of an appliance, furniture,

a facility or a service supplied by the lessor with the

(i) the withdrawal of the appliance, furniture, facility or service by the lessor; or

(ii) the failure by the lessor to maintain the premises and any appliance, furniture or facility supplied with the premises in a reasonable state of repair, having regard to their condition at the commencement of the residential tenancy agreement; or

(iii) the failure by the lessor to provide and maintain the locks or other security devices necessary to ensure that the premises are reasonably secure;

(b) the loss of the use of all or part of the premises;

(c) interference with the tenant's quiet enjoyment of the

premises or the tenant's ability to use the premises in reasonable peace, comfort and privacy by the lessor or anyone claiming through the lessor or having an interest in, or title to, the premises.

(2) To remove any doubt and for subsection (1), a tenant's quiet enjoyment of premises is interfered with if there is substantial interference with, or a significant lessening of freedom in exercising, the tenant's rights.

(b) remains in force for the period, not longer than

(4) The ACAT may order a lessor to pay to the tenant the

difference between the rent paid and the rent payable as

(5) Any purported increase in the rental rate in relation to

premises for which a reduction order is in force is void

and any amount paid above and beyond the reduced rental rate in accordance with a purported increase is a debt owing by the lessor to the tenant.

1. I now turn to the specifics of the tenants' issues, and will deal with them seriatim. I am greatly assisted in this task by the clear and concise summaries provided by the disputants:

1. Key maintenance tasks to be undertaken by the lessors: - 1. Repair to front door. This was required (reasonably, in my opinion) at the commencement of the tenancy. The evidence suggests that the lesors did in fact undertake to repair this damage. There is dispute as to whether the doors were in fact secure, but given that the tenants had leased an "executive residence" and had made it known to the lessors that a part of their duties were representational, and hence they had a legitimate need for an up-market residence, I think it is fair to say that their entrance should be reasonably prepossessing, at least to the level of the rest of the admittedly 45-year old house. I note that the tenants did in fact effect a level of repair themselves, and were reimbursed the material costs of $21.66. 2. Hallway wallpaper and painting: - 1. The evidence shows that the hallway was in need of a lick of paint before the lease was signed. The tenants rely upon the representation that the lessors would do it up. Whilst I accept that this work had to be done - not because of the need to render the house acceptable, but because the lessors promised it - I do not hold that further compensation lies to the tenants as a result of the timeframe in which this was completed.

1. Bathroom window replacement: - 1. It is clear the window had to be replaced, and I accept that for whatever reason this work was not completed in a timely manner. I am sympathetic to the lessors' difficulties in procuring a subcontractor who would not go bankrupt, and who would attend in a timely and competent manner. But ultimately, that is the lessors' risk. A tenant pays rent to a lessor precisely to avoid that sort of irritation. 2. I think it is clear that whilst the lessors had real difficulty in getting this work done, the role of the lessor is such that he or she assumes in return for recompense the responsibility to provide a tenant with a property that is as free of issues as is reasonable to expect from the property given its age and type. 3. In this instance, the tenants are due some relief from the rent for having to bear the lack of maintenance-performance.

1. Bathroom exhaust fan: - 1. This was not working at the commencement of the tenancy, and the lessors promised to rectify it. This did not happen. I hold that that is a compensable matter. 2. The lease was effectively for 59 weeks (12th February 2008 to 2nd April 2009 which is 415 days rounded down). I estimate that this is worth $3 per week, for 59 weeks - $177.00. 2. Pool cover: - 1. No pool cover was mentioned in the incoming condition report, and it appears that the pre-existing one was mostly destroyed by a previous tenant. Desirable as this item is, it is not a sine qua non, and I hold that no compensation is payable in respect of its absence. 3. TV Antenna installation: - 1. There was no antenna and no promise that one would be provided. The lessors permitted quotes to be obtained, but no promise was ever made that they would be acted upon. No compensation lies in respect of this claim. 4. Dishwasher repair: - 1. Between 3rd March 2008 and 11th April 2008 the upper spinner of the dishwasher was found to be missing. This was replaced. Whilst the machine operated with reduced efficiency for the period in question, it operated. I am not therefore ordering compensation for this item. 5. Trimming of front tree: -

1. The tenants trimmed a tree that was in distress as a result of the drought.

1. The tenants wrote to the lessors in an email of

26th February 2008, offering to cut the dead limbs off the trees. Taken with the endorsed condition 27 requiring the tenants to maintain the property grounds, and the fact that on the tenants' evidence the trees were in poor shape at the commencement of the tenancy,

I do not see that any compensation lies here for what is effectively a gratuitous act of the tenants.

1. Master bedroom flyscreens: - 1. Whilst there were no flyscreens on the window at the commencement of the tenancy, it would be reasonable to expect that some should have been provided in a house of this calibre. 2. And they were. Whilst not provided very promptly, the evidence shows that they were provided. I do not find that they were unreasonably - or at all - withheld by the lessors. Accordingly, no compensation lies in respect of this claim.

1. Bedroom 2 Flyscreen hole: - 1. I cannot understand why with all the other communication evident in this matter, that the issue of holes in one of the screens had been overlooked. However, this seems to have been the case. The tenants clearly did replace the wire, and at an apparently reasonable cost. I allow this claim. 2. I assess it at the $30 claimed, plus some labour at an equivalent amount. - $60.00 2. Rear stairs: - 1. In April 2008 the tenants advised the lessors that the rear stairs needed repairing. The evidence suggests that the tenants fixed this of their own volition, and brought it to the attention of the lessors afterwards. (I am somewhat unsure when, however. The date agreed by both parties seems to have been "early April 2008", but the email evidencing this provided by the applicant tenants is actually dated 14th May 2008. Perhaps the parties spoke earlier, and confirmed it in the email?) 2. In any event, the stairs finally broke irretrievably in

December 2008, which fact was relayed to the lessor in a letter dated 14th December 2008 but not apparently read by the lessors until 29th December 2008. The stairs were fixed 2 weeks later on 15th January 2009. Funny things happen in the silly season. But in this case, I am satisfied that the delay was not unconscionable. I hold that no compensation lies here for delay. 3. I would presumably have allowed the cost of a couple of "longer screws" in respect of the earlier repair, had the applicant quantified this cost. But they have not done so, and

I do not imagine that it would be a significant amount.

1. Gas leak from Stove: - 1. Whilst the lessors rather unreasonably appeared to have belittled the complaint when it was first made by the tenants, he did at least obtain the advice of a professional, who did indeed discover a leak. 2. From the date the leak was discovered (29th January 2009) to the date of repair (2nd February 2009) was 4 days. This is not an unconscionable dereliction of duty in the light of the gasfitter's evidence that he did not consider it dangerous. 3. I do not like gas leaks in houses, rented or otherwise. But I am not satisfied that the manner in which this issue was treated reflects so poorly on the lessors that compensation is due in respect of it.

1. The next matter raised in the pleadings is the flooding of the downstairs areas. I regard this as significant, and will be dealing with it infra, rather than in this sequential list. 2. Air-conditioner pipe flooding: - 1. In January 2009 the air-conditioner pipes caused water ingress into the lower front room and lower bedroom of the property. 2. It appears that this was a maintenance issue caused by a pipe breaking. Although it was notified on 29th January 2009, it was not fixed until 13th February 2009. 3. That the lessors were "down the coast" is not a defence. As set out above, it is precisely this sort of thing that the tenants pay rent for, rather than assume responsibility for maintenance costs of their own housing. 4. Accordingly, I allow compensation for the inconvenience suffered in this incident. However, it was a relatively minor inconvenience for only a short time, so the amount is not great. I assess this at $150.00

• Outdoor umbrella cable: - 1. Once again, an incident at Christmas season took longer to be repaired than it might otherwise have done at any other time. Unfortunately, it was of an item that was most likely to be in use at that season. 2. There is a suggestion that the damage was caused by the tenants in overwinding the mechanism, though this is just an assertion unsupported by compelling evidence. (I cannot be certain who wrote the hand-written analysis on the account tendered in evidence). 3. Whilst I accept that in theory at least the tenants' utility was diminished, I cannot seriously believe that it was to a very high degree. Perhaps I am viewing this through the lens of my own horror of being outdoors in the sun on a hot day - with or without an umbrella. However, whilst I can concede that some theoretical loss of utility has occurred, there has been no evidence given that the tenants were seriously outdoorsy or sporty people who relied on being outdoors at that time.

1. Pool safety measures: - 1. These on the other hand I take very seriously indeed. On the other hand, there does not appear to have been a breakage or similar of any of the things that were in place when the tenants took the property. 2. The lessors allege in evidence that they bought the house and pool in that condition and that they made or caused to have had made relevant compliance inquiries. The tenants did not counter that position. 3. Whilst the tenants' public spirit in ensuring compliance with appropriate safety regulation is to be commended, it is hard to see how the tenants' unsupported view of the lessors' degree of compliance in respect of a property that they took on in that condition can be viewed as anything other than meddlesome. No compensation lies here. 2. Loose pool pavers: - 1. It is hard to know where a serious responsibility for a danger begins and mere inconvenience attaching to an older-style property ends. Whilst it is true that a loose paver could present a hazard, it does not in my view amount to something for which the lessors should pay compensation. 3. Loose power point in bedroom 1. Loose electrical items are always a concern. But the tenants themselves mitigated the risk of damage by placing a lowboy in front of the offending item. They have not pleaded or alleged that they needed the power point - merely that it was dangerous. As indeed it might have been. 2. But as before, the purpose of compensation is not to penalise a lessor for an infraction - it is to compensate a tenant for a loss of amenity. I do not find that compensation lies in this instance. 4. Front veranda condition: - 1. It is true that the veranda probably needed a good rejuvenation. But again, commensurate with the age of the house and the general expected condition, I think that the lessors probably acted above the call of duty in this instance. No compensation is appropriate here. 5. Tree limbs removal: - 1. This has been dealt with supra. 6. Bathroom ceiling in need of painting: - 1. Without canvassing the obligation of a lessor to paint in the first year of a tenancy, I state that I do not consider that compensation lies for this matter.

1. Front door handle loose: - 1. The tenants lived with this inconvenience for about 2 weeks. Whilst I accept that door furniture should be of an adequate standard, both for security and beauty, I do not consider that this inconvenience merits compensation.

1. Lower rumpus screen door: - 1. This door was not noted as being present on the condition report tendered to the hearing. Its demise forms a part of the flooding issue, which will be dealt with infra.

1. Pool solar heating: - 1. Although the tenants alleged that the heater did not perform appropriately, the service agents who attended some 3 weeks after the matter was notified found that the there was nothing wrong with the unit. I do not have enough evidence to find that the lessors have failed in any duty here.

1. Bubbled paint: - There are two areas of paint bubbling referred to - 1. Front entrance ceiling - 1. Although the tenants state that no action was taken, the lessors state that the eve was repainted about 4 weeks after being notified. No compensation lies here. 2. Outside bathroom window - 1. The tenants allege that had this been attended to, the flooding and loss of personal possessions would have been minimised when water entered. 2. Whilst in hindsight this may be so, it does not constitute grounds for compensation of itself. 2. Toilet cistern flusher: - 1. The toilet worked. Presumably the tenants could have pushed the half-flush button twice if a fuller flush were needed.

I reject the contention that this mechanical failure diminished the utility of the house to a degree that might be considered compensable. 2. Having dealt with the majority of the items argued in the first and second heads of the applicants' application, I now turn to the third one being the question of the alleged excess rent charged. 3. The tenancy as has been noted commenced on 12th February 2008. On

15th January 2009 the lessors wrote to the tenants stating inter alia that the rent was to increase by the CPI figure as promulgated by the ABS. The figures used for that calculation were the September 2008 quarter as published 4. The legislative scheme relating to rental increases is that the standard residential lease terms (which is the case with this lease) set out how rents should be increased. In this case, the appropriate terms are:

1. The lessor must give the tenant 8 weeks written notice of intention to increase the rent and include in the notice the amount of the increase, and the date when it is proposed to increase the rent.

39 (1) The tenant may apply in writing to the tribunal for review of an excessive increase in rent (time limits for applying and the meaning of excessive is set out in the Residential Tenancies Act).

(2) On such application being made, no increase in rent is payable until so ordered by the tribunal.

1. If the tenant remains in occupation of the premises without applying to the tribunal for review, the increase in rent takes effect from the date specified in the notice.
2. There were no special conditions concerning the assessment of rent increases in the endorsed extra terms.
3. The act itself goes on to set out at section 67 the orders that ACAT may make in respect of proposed rental increases.
4. In this matter, the lessors gave notice by letter on 15th January 2009 that the rent was to increase by a particular sum, which the lessors had calculated on the basis of the lessors' perception of the correct CPI figure to employ.
5. The tenants replied by letter of 29th January 2009 that they did not accept this. The basis of their argument was that a different CPI figure should have been applied.
6. Much discussion appears then to have ensued with each side calling on the fact that they had support for the particular propositions that each espoused.
7. The tenants correctly took the advice of the person from the Tenants Union with whom they communicated that they had to pay the increase as sought until ACAT considered the matter.
8. A curious anomaly now arises. Although Term 39(1) of the Lease Standard Conditions states that time limits for applying are set out in the act, there is in fact no mention of these. Accordingly, we are constrained to look to the Legislation Act 2001(ACT), specifically section 151B, which states:

(a) under an Act or statutory instrument, something must or may be done; but

(2) The thing must or may be done as soon as possible and as often

1. There is scope for debate in a matter where a matter of dispute arises and the parties do not file that dispute with ACAT for a week or a few weeks. But this matter only came to ACAT in the context of a dispute about many (other) things, and was filed on 26th October 2009 - some nine and one half months after the particular dispute arose.
2. I suggest that this is so long after the date of the irritant that in the absence of having taken or even foreshadowing action with ACAT, the doctrine of laches - that doctrine of law that holds that a failure to take action effectively - estops the aggrieved party from taking action.
3. I note that in the letter to the lessors of 15th February 2009, the tenants stated:

"We do reserve our rights under the Residential Tenancies Act 1997 to take this matter to the ACAT at some time in the future."

1. For the record I hold that that is not a right capable of reservation without the consent of the lessors, and that accordingly I view the tenants as having "slept on its rights". It follows from this that the tenants are bound by the rental increase.
2. I also note that the question of which CPI percentage to apply is largely nugatory. The amount of an increase that must be demonstrated in an argument about reasonableness before ACAT may look to this as evidence (s68 of the act). But in the circumstances of this matter, the lessors had elected to put the rent up by what is effectively an arbitrary amount - albeit with a (possibly erroneous, but overall wholly irrelevant) justification. But until this is tested in the ACAT, there is no finding of excessiveness.
3. I hold that no compensation lies in respect of the rental increase question.
4. I turn now to the "big-ticket item" in this application - the question of liability for flood damage.
5. As I understand it, on 8th December 2008 it (somewhat unusually for that time!) rained. The drain could not disperse the run-off, and/or it was blocked with leaves. As a result, water entered the downstairs room and the lower bedroom.
6. The tenants removed their possessions from the water-affected areas, and mopped and cleaned the rooms.
7. They also hired a blower to dry the carpets. The tenants somewhat self-serving evidence indicates that the lessors agreed to pay for this.
8. This would have been bad enough, but on 7th January 2009, it happened again. Rain that fell overwhelmed the drainage, and entered into the same area. Again the tenants had to remove items, mop out the affected area, and hire a blower to dry the carpets.
9. The evidence here becomes a little unclear. The lessors allege that he had had no indication of a flood risk when he purchased the property. They pointed out that the lower front room was originally a garage that had been converted into a workshop.
10. On the other hand, the tenants allege that this had occurred previously in the previous tenancy. They do not state the source of that intelligence, but I am minded to accept it, given the tenants' overall demonstrated ability to present and cross-reference his assertions.
11. From my own perspective, I find it considerably unlikely that a property would flood (during a drought) twice in 2 months but never have done so previously.

I am irresistibly led to the position that this converted garage had a proclivity to flood, and that if that were the case, it is unlikely that the lessors did not know of it. 12. The next part of the saga is that the lessors started to make plans with builders to vary the structure of the wall downstairs to prevent flooding recurring. Tellingly, the lessors' email to the tenants of 7th January 2009 contains the phrase "...as our insurance company, will not allow another claim for any future flooding." I take this to indicate that there has been a history of this occurrence. 13. It now becomes unpleasant. The evidence suggests that the builder in concert with the lessors had decided to effectively rebuild the house around the tenants during the tenancy. Quite apart from the question of the tenants' piano, which it is stated would not fit anywhere else, the utility of the bicycle storage area and access seemed to have been overlooked. 14. The tenants do not help this process overly much. In telling the lessors how they should be spending their money they are not proceeding in a way calculated to win the trust or even compliance of the lessors. 15. On the other hand, I have some difficulty with the problem of lack of amenity caused by the lessors' proposals, when the tenants put forward a cheaper, but apparently equally workable option of a line of bricks to divert the water and a rebuilt drain. It seems to me that the tenants' proposal, no matter how arrogantly stated, was a sensible one that would have worked and saved everyone a lot of money. 16. The tenants' fears of not being insured whilst they were absent leading to the work not being done at all appears to have ended any hope of the matter resolving peaceably. No remedial work was ever completed during the tenants remaining time at the property. 17. On balance, I am satisfied that the lessors did not adequately consider the needs of the tenants in this situation. I am also satisfied that the proposals that the lessors sought to implement were not compatible with the quiet enjoyment principles of the act. 18. I note that this is not an application for an order under section 83 of the act for breach of a lease. It is an application for compensation under section 71 of the act for failure by the lessor to adequately deliver what the tenants "paid" for.

I find therefore that the flooding and the risk of flooding significantly diminished the tenants' ability to enjoy the property, and I award a reduction in rent of $55 per week for the whole of the period of the lease. This yields $3,245.00 reimbursement to the tenants. 19. In addition, I note that there are some as yet undealt with matters arising from the flooding. There is the matter of the as-yet no reimbursed bills for the dryer ($160.00), damages to the tenants items (claimed at $290.00) and the electricity usage assessed at $37.15. In the absence of any argument to the contrary I find this to be acceptable. 20. I am not however allowing the claim for compensation for the removal of items. I think this can be subsumed in the general compensation I have allowed. 21. I note that at the hearing issues were raised about the appropriateness of the rent in the first place, and that in the submission period parties were permitted to produce evidence of prevailing rents in the area at the appropriate time. 22. Whilst I have read that material with interest, I think that the question is not properly one that is before me. The parties made a bargain with each other for a certain sum, and that was the end of it. If it turns out that one of them was (with hindsight) wrong as to what constituted a bargain, then that is unfortunate, but not compensable, any more than a lessor could seek more money from a tenant if it turned out that he had undercharged. 23. The issues in this matter turn not on what the bargain might have been, but rather on how well each party honoured the terms of the agreement they had, within the terms of their legal obligations. 24. I also note that throughout these proceedings, mention has been made of aspects of non-compliance with their obligations under the lease by the tenants. No counterclaim is lodged in respect of these matters.

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