CIVIL AND ADMINISTRATIVE TRIBUNAL ) No: RT 313 of 2009

1. The premises, at 61 Healy Street, Spence ACT, consist of a two storey building. The upper floor is a four bedroom flat linked by stairs to a double garage on the lower floor. The applicant tenants occupy this area. The rest of the lower floor is a one bedroom self contained flat that the respondent lessors occupy.
2. The tenants have been living in the premises since May 2002. The lessors are usually absent from the premises from April to October each year, during which time they are overseas.
3. From late January 2008 to April 2008 the lessors undertook an extension, consisting of expanded living space within the one bedroom flat, and a one car garage, at one side of the house. The lessors were absent from April to October, and upon their return commenced building work inside the extension to their living space. This internal work continued over the period from late October to late December.
4. On 24 February 2009 a TV antenna was installed on the roof of the tenants' flat.
5. During March 2009 some trees were removed, digging was done, a concrete foundation was poured and a water tank was placed in the back garden.
6. The tenants filed an application with ACAT on 18 May 2009, alleging multiple breaches of section 52 of the tenancy agreement over an extended time ie landlords have not rectified problems impacting on our comfort, have breached our privacy, caused considerable noise nuisance and performed building works at inconsiderate and unreasonable times. The tenants seek compensation for interference with their quiet enjoyment of the property.
7. The Tribunal notes that prior to this application:

1. The lessors had notified the tenants of an increase in rent to $400 per week; the tenants objected to this and after some negotiations the rent was set at $375 per week from 19 January 2009; 2. The lessors immediately upon accepting a rent of $375 per week issued a Notice to Vacate under clause 94 of the residential tenancy agreement.

1. There has been correspondence between the tenants and the lessors' agent Raine & Horne Gungahlin, since 20 April 2009. This correspondence addressed some of the issues before the Tribunal, but also raises two other matters: 1. Ongoing problems with the heater - about which the Tribunal makes no comment, and 2. The issue of electricity payments. The electricity account is in the tenants' names and the parties split the electricity costs. There is only one electricity meter and the entire cost of electricity is, under clause 42 (c) of the residential tenancy agreement, a lessors' expense. The tenants have stated that they do not wish to make an issue of the electricity arrangements. The Tribunal notes that Raine & Horne have refused to either install a separate meter or properly address this issue by transferring the electricity account to the lessors' name. Agents ought to be aware of the requirement for endorsement of a term relation to payment of electricity in a manner inconsistent with the standard terms. There is no evidence before the Tribunal of any such endorsement. At the date of the application the lessors had caused the electricity to be connected in their name and commenced paying the electricity account in its entirety.
2. The tenants' application is thus confined to seeking compensation for the interference with their quiet enjoyment occasioned by the extension, building and renovation work as well as the impact of the physical changes to the premises upon their use and enjoyment of the premises.
3. The Tribunal heard the matter on 18 June 2009. The tenants were present as were the lessors. The lessors were represented by Ms Rachel Bird, Solicitor. After hearing evidence and submissions form the parties the Tribunal adjourned for a written decisions and invited the parties to make further submissions in writing within 14 days of the hearing. Both parties made further written submissions.

1. Clause 52 residential tenancy agreement provides that the lessor must not cause or permit any interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises.
2. Section 71 of the Residential Tenancies Act 1997 provides:

(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:

(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.

(3) A reduction in the rental rate ordered under subsection (1) -

(a) takes effect from the day the tenant's use or enjoyment of the premises diminished, or the later date that the ACAT specifies; and

(b) remains in force for the period, not longer than 12 months, specified by the ACAT.

(4) The ACAT may order a lessor to pay to the tenant the difference between the rent paid and the rent payable as a result of an order for a rental rate reduction.

(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. Section 83(1) of the Residential Tenancies Act 1997 provides that ACAT may make the following orders in relation to an application about a tenancy dispute or occupancy dispute:

(d) an order requiring the payment of compensation for loss of rent or any other loss caused by the breach of a residential tenancy agreement or occupancy agreement;

1. Whereas section 71 requires that there be a significant loss of quiet enjoyment section 83(1)(d) contains no such qualification.
2. As a general rule the Tribunal tends to apply s71 to award compensation by way of rent reduction whilst the tenancy is still in existence and to use section 83 (1)(d) [ formerly s104(1)(d)] to provide for lump sum compensation where the tenancy has ended. Watson v Gaudion (Residential Tenancies)[2009] ACAT 15. The Tribunal notes that at the dates of the application and hearing the tenancy was in existence, but in submissions dated 25 June 2009 the tenants have informed the Tribunal that the tenancy has ended. The tenants in their application sought compensation for breach of the residential tenancy agreement. The Tribunal intends to proceed under section 83(1)(d).
3. The fact that the building work took place is not in issue. The question for the Tribunal is whether the lessor, in breach of clause 58, caused or permitted any interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises.
4. The evidence of the tenants:

1. The tenants in their application state, inter alia: 1. They were not consulted about the building work, nor advised that it would be carried out; 2. That the work continued over 7 days a week for considerable periods of time; 3. That they had regularly had people on the roof and on ladders outside their windows; 4. That their use and access to the garden had been compromised because the extension and water tank had reduced the area of lawn and access to the back of the house. 2. Document 5 attached to the application is a letter from the tenants to the lessors dated 4 April 2009. In this the tenants assert: 1. They had no warning or notice of the work commencing; 2. That they had guests arriving on the day the work commenced, that the lessors had known of this and that this had caused inconvenience. 3. The noise caused by 'hammering, drilling and grinding' during the second stage of renovation was a nuisance. 4. That the installation of the water tank had caused noise and inconvenience; 5. The noise from installing guttering had interfered with the tenants' son's preparation for examinations; and 6. The sun reflected off the roof of the extension and into the lounge room of the tenants' remises, causing excessive heat. The lessors installed a blind on the relevant widow - this reduced but did not entirely diminish the extra heat.

1. Document 6 attached to the tenants application is a table showing dates and activities which the tenants assert have interfered with their quiet use and enjoyment of their premises. The Tribunal notes that the table does not show any period of seven days of continuous work and, with the exception of 5March 2009, does not show any whole day of activity.

1. In oral evidence the tenants agreed that it was an exaggeration to claim that work continued for seven days a week and conceded that work was carried out between on perhaps 15 days over March and Aril of 2008. 2. In their written submission of 25 June the tenants state that they dispute that it only took 15 days over a 3 month period to complete the extension. Out recall is that work was generally going on in some form for at least half of every week between January and April. Further they submit that the work was not continuous but that it was intrusive.
2. The evidence of the lessors, given during the hearing and submitted in writing was:
   1. The tenants were informed at a pre-Christmas barbecue in 2007 that the lessors were going to make additions to the premises. The tenants agreed that a discussion had taken place at the barbecue but asserted that they were not given precise information as to the extent or timing of the building work.
   2. The work on the extension commenced in late January 2008 and the foundations for the extension were laid and the cement slab poured while the tenants were holidaying. This was conceded by the tenants during the hearing. The remainder of the work was conducted during daylight hours of Monday to Friday.
   3. Most of the work had been carried out by Mr Matesa and his friends. At no stage during the work did the tenants make any complaint to the lessors. The tenants state in their written submissions that they did not complain because they did not want to damage their relationship with the lessors. The tenants state that _we had already discovered that they do not like being challenged, as previous rent increase negotiations did not get far. It was a matter of take it or leave it, and it was clear then that not backing down would have caused an inflamed situation. This is exactly what happened when we did attempt to negotiate the 2009 rent increase - Mr Matesa got very agitated..._The Tribunal has no evidence as to previous rent negotiations but notes undisputed evidence form the lessor that the rent has increased from $290 to $345 from 2002 to the latest increase in January 2009. This is a low rate of increase for a seven year period. Further, on the tenants' evidence the building work, except for the installation of the water tank was completed prior to the last rent increase and so the lessors' response to attempted rent negotiations in January 2009 could not have influenced the tenants' decision not to complain about building work conducted over the previous year.
3. The Tribunal also notes that the arrangement between the lessors and the tenants was somewhat unusual and that during the time the lessors were in residence the parties had shared access to the gardens and yard and it appears from the evidence of each party that they enjoyed a friendly relationship. The Tribunal therefore concludes that it is more likely than not that the lessors had, at least informally, given to the tenants information about the proposed extension.
4. The building work was external to the premises occupied by the tenants and in the circumstances there would be no need for more formal notice of the intended work.
5. The building work was not maintenance or repair of the premises, but an improvement for the exclusive benefit of the lessors.
6. Apart form the general claim of noise and inconvenience the tenants have provided little precise evidence as to the nature of the interference with their quiet use and enjoyment of the premises.
7. The tenants made no attempt to inform the lessors while the work was occurring that they were disturbed, or to ask the lessors to confine the work to particular times. Indeed once the tenants had complained of the reflection of the sun from the roof into their lounge room the lessors installed blinds to combat the problem.
8. It appears that the relationship between the parties was soured by the rent negotiations and it was only in response to the notice of rental increase that the tenants raised the issue of a 'retrospective rent reduction' for the period of disturbance caused by the building work.
9. Work of the type undertaken by the lessors would cause noise: the use of a jackhammer, drills and other tools in close proximity to the tenants' premises would have impacted upon their use and enjoyment of the premises. The presence of the persons, apart from the lessor, undertaking the work would impact upon the tenants' sense of privacy. The physical extent of the extension reduced the areas of garden and lawn available to the tenants.
10. A residential tenancy promises quiet use and enjoyment and the lessors must not cause or permit any interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises. The Tribunal finds that the lessors have breached clause 52. Any breach of contract entitles the innocent party to compensation.
11. In light of the fact of actual breach, but little evidence beyond general inconvenience from noise and diminished privacy, the Tribunal awards the tenants compensation in the amount of $250.

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DATE OF HEARING: 18 JUNE 2009 PLACE: CANBERRA

DATE OF DECISION: 20 JULY 2009 PLACE: CANBERRA

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