Residential tenancy - landlord's application for payment of bond and compensation - compensation not to be awarded for fair wear and tear given life of the premises - aspect of decision set aside

Residential tenancy - landlord's application for payment of bond and compensation - tenant liable for allowing damage to worsen once becoming aware of defect - tenant liable for poor remedial work - aspect of decision affirmed

Residential tenancy - landlord's application for payment of bond and compensation - open to the Tribunal to make holistic award for compensation without applying strict mathematical formula

Residential tenancy - tenant's cross-application - excessive rent - variation of rent cannot be ordered retrospectively - tenancy ended before date of application - no order for rent variation based on excessive rent

Residential tenancy - tenant's cross-application - costs of litigation - Tribunal as a no costs jurisdiction

Residential tenancy - tenant's cross-application - breaches of Residential Tenancies Act 1995 - breaches claimed by tenant unsupported by evidence

Internal review - nature of internal review - correct and preferable decision - fresh evidence - question for determination on internal review remains the same question as was raised for determination in the original proceeding

Residential Tenancies Act 1995 s 56

South Australian Civil and Administrative Tribunal Act 2015 s 70

Polglase v Pett (Unpublished, SACAT, Member Armour, 20 September 2018)

Respondent - Ms Stephanie Zora, Adcorp Property Group

1. This dispute concerns a tenancy at 10 Gleneagles Ct, Greenwith. The tenancy commenced on 2 July 2016 and concluded on 1 July 2017. The tenants are Mr and Mrs Pett. The landlord, Ms Polglase, has been represented throughout these proceedings by her agent, Ms Zora. On 20 September 2018, in matter number 2017/SH012644, the Tribunal decided an application made by the landlord, through her agent, for payment of the bond and compensation from the tenants. The landlord identified a claim of $2,315.00. The landlord's claim related to the repair of a shower screen, cleaning of walls and carpets, marks on the dishwasher and a hole in the bedroom wall. The tenants made a cross-claim for excessive rent, costs of litigation, and various breaches of the Residential Tenancies Act 1995 (the RT Act). The Tribunal awarded compensation in favour of the landlord in the sum of $1,500.00. The bond of $2,100.00 was ordered to be paid to the landlord in the sum of $1,500.00, with the remainder being returned to the South Australian Housing Trust, which had guaranteed the bond, in the sum of $600.00. The tenants' claim was wholly rejected. That decision will be referred to as "the original decision". The tenants now seek to challenge the original decision and have brought this application for review.
2. The relevant findings of the Tribunal in the original decision were:
   • (a) The tenants failed to reinstate the glass panels of a shower screen back in the bathroom where they were when the tenancy commenced. The screens were removed by the tenants to install a wheelchair access shower. The failure to reinstate the panels at the end of the tenancy was a breach of the lease. The landlord was awarded unspecified compensation for this.
   • (b) The invoice for cleaning supplied by the landlord was unreliable. No compensation for cleaning was granted.
   • (c) The carpets were stained at the end of the tenancy and $200 compensation was awarded to the landlord.
   • (d) The dishwasher was scratched however this was fair wear and tear.
   • (e) Concerning a hole in the wall in a bedroom at door-knob height, some of the damage was caused by there not being a doorstop, however the extent of the damage was such that the tenants should have appreciated the damage would be ongoing unless steps were taken to use a doorstopper. The tenants could have mitigated the damage. Compensation was granted to the landlord however at an amount reduced considering the fact there was no doorstopper to begin with.
   • (f) A report obtained by the agent from Mr Dodd, a builder, setting out his opinion of the costs to rectify various minor incidents of damage in the property was generally reliable and accepted.
   • (g) Concerning the tenants' cross-claim, there was no basis to make any order for compensation for excessive rent, litigation costs or for the alleged breaches of legislation. No award of compensation was made in favour of the tenants.
3. The Tribunal in the original hearing received a report produced by Mr Dodd, retained by the landlord, dated 27 September 2017. Mr Dodd's company is used by the agent from time to time to perform maintenance on properties the agent manages. The Tribunal broadly accepted the report and the estimated costs of repairs within it. In awarding compensation to the landlord in the original decision, the Tribunal awarded compensation on a holistic basis and without applying a strict mathematical formula. In other words, the amount awarded was not broken down into specific amounts for each item of damage found to warrant compensation.
4. The Petts submitted that as the Tribunal in its original decision had only specified three quantified awards (being for the shower screen, the hole in the wall and carpet stains), they need only satisfy the Tribunal on review that those awards were incorrect and they would succeed in respect of the landlords' claim. However, this fails to confront the Tribunal's acceptance of the other matters set out in the Dodd report and the Tribunal's acceptance of those matters, and their inclusion in a "holistic" award.
5. I find that there are no grounds to set aside the original order in its entirety however, the correct and preferable decision is to vary the order in certain respects. My reasons are set out below.

1. Section 70 of the South Australian Civil and Administrative Tribunal Act 2015 outlines the nature of the internal review. It states:

(1) Subject to this section, an application for a review of a decision of the Tribunal -

(a) in the exercise of its original jurisdiction; or

(b) as constituted by a registrar or other member of the staff of the Tribunal, may be made under this section.

(1a) An application for review under subsection (1)(b) is only by leave of a Presidential member of the Tribunal.

(2) An application for review must be instituted within 1 month of the making of the decision to which the application relates but the Tribunal may, if it is satisfied that it is just and reasonable in the circumstances to do so, dispense with the requirement that the application should be instituted within that period (even if the time for instituting the application has expired).

(3) The President may determine, in relation to a particular matter, or particular class of matters, how the Tribunal will be constituted for the purposes of this section.

(4) On a review, the Tribunal will examine the decision of the Tribunal at first instance on the evidence or material before the Tribunal at that time but the Tribunal may, as it thinks fit, allow further evidence or material to be presented to it.

(5) The Tribunal must, in acting under this section, reach the correct or preferable decision but in so doing must have regard to, and give appropriate weight to, the decision of the Tribunal at first instance.

(6) The Tribunal may, on a review under this section -

(a) affirm the decision that is being reviewed; or

(b) vary the decision that is being reviewed; or

(c) set aside the decision being reviewed and -

(i) substitute a new decision; or

(ii) return the matter to the Tribunal as constituted at first instance for reconsideration in accordance with any directions or recommendations that the Tribunal acting on review considers appropriate.

(7) The Tribunal may, on a review, make any interim order pending any review, or any reconsideration and determination of the matter, under this section, or any ancillary or consequential order, that the Tribunal considers appropriate.

1. At the hearing of the internal review, Mr and Mrs Pett made submissions and Mr Dodd was made available for further cross-examination. The landlord, Ms Polglase, did not attend in person (though she had participated in previous hearings) due to ill-health. The landlord was represented by her agent, Ms Zora, of Adcorp Property Group.
2. In their application for internal review, Mr and Mrs Pett ask for the original decision made by the Tribunal to be set aside. They request a new order to be made to the effect that the bond will be refunded to them in full. The tenants sought to bring new evidence to the Tribunal at the internal review hearing. At a directions hearing, I gave permission to the respondents to cross-examine a witness (Mr Dodd) at the internal review hearing. I also gave the tenants permission to file any fresh evidence and written submissions by a date confirmed prior to the hearing. The landlord, through the agent, had permission to respond to those further submissions.
3. During the hearing for internal review, the tenants made submissions relating to:
   • The process of the outgoing inspection, including not being provided the outgoing inspection sheet at the final inspection
   • The panels in the shower screen
   • The insurance claim made by the landlord against the tenants' bond
   • The claims made for carpet stains
   • The patching of the hole in the bedroom wall
   • Mr Dodd's report generally
4. Mr and Mrs Pett felt they did not have the time to canvass all the issues they would have liked at the internal review hearing. I do not accept that they did not have adequate time but in any event I gave them permission to make written submissions on their claim within seven days of the hearing. I have had regard to the material that was submitted by the parties to the Tribunal prior to and following the first hearing. I have also had regard to the written submissions of the parties made prior to and following the internal review hearing. This included but was not limited to a document submitted by the tenants headed "position statement" dated 8 November 2018, and an extensive written submission made after the hearing for internal review dated 7 December 2018. I am satisfied that they have had an appropriate opportunity to put their case, noting the obligation on the Tribunal to ensure that matters are heard in a manner that properly uses the Tribunal's resources, and the fact that no issue of particular factual or legal complexity was raised.
5. The broad argument made by the tenants is that the landlord's claims amounted to an unlawful recoupment of the costs of redecorating and repairing an older-style house so that she may sell it. From their perspective, the house required redecorating when they commenced the tenancy, and they ought not to be held liable for damage that had accumulated over time.

1. Ingoing and outgoing inspection reports performed at the beginning and end of a tenancy provide a contemporaneous record of the state of premises. In this case, the ingoing inspection report was not perfunctorily filled out. The allocation of a variety of different descriptors for the various items indicated that the document had been given some consideration.
2. I am content to accept the ingoing inspection report as reasonably accurate and is the best evidence of the state of the tenancy on the points on which the parties could not agree. As will emerge, this creates a difficulty for the tenants in their attempts to refute certain of the landlord's claims for compensation for repairs.
3. By the time of the outgoing inspection, the parties' relationship was strained. No outgoing inspection report was jointly completed at the hand-over of the premises. Much of the tenants' case was based on an allegation that the landlord and agent had contrived a claim by falsifying this document, which was provided to the tenants some weeks later. Mr Pett submitted that the outgoing inspection was not executed correctly and that the conduct of the agent and landlord during the inspection suggests that the landlord was planning to make unsubstantiated claims against the tenants in order to fund the redecoration of the house for sale. Mr Pett gave evidence that:
   • The landlord arrived excessively early for the inspection, so left and then arrived 20 minutes late;
   • The agent, Ms Zora, arrived 20 minutes before the due time for the inspection;
   • The landlord was accompanied by a carer during the inspection and the carer had an association with a shower company;
   • The landlord and carer went straight into the bathroom and began talking about the shower;
   • He (Mr Pett) needed to leave the inspection and so left his wife there, who was largely ignored throughout the entire outgoing inspection;
   • When he returned to the property, it was clear to him that there had been some sort of disagreement between the landlord and her agent concerning the shower;
   • The agent conceded at the inspection that the landlord did not understand that she could not charge the tenants for redecoration;
   • He showed both the agent and the landlord the hole that he had patched in the bedroom and the paint he had bought to finish off the work, but was refused permission to complete the job;
   • He and Mrs Pett were not supplied with an outgoing inspection sheet on the date of the inspection, but rather three weeks later;
     • Within this three weeks the landlord had contrived a false claim.
4. The outgoing report is diminished in its value to the Tribunal because of the fact that it was not completed and counter-signed by both parties on the occasion of the completion of the tenancy. I consider that the photographs submitted by the tenants give a contemporaneous record of the tenancy at its conclusion. I was taken though these photographs in detail. It is fair to observe that the photographs of the house at the end of the tenancy show a tidy house that has evidently been cleaned. Unfortunately, they only address certain views of the rooms and cannot resolve some of the remaining disputes. In light of this, the reliability of Mr Dodd's report became significant to the determination of the landlord's claims. These are most conveniently dealt with separately.

1. The majority of the internal review hearing was spent receiving the tenants' submissions regarding the shower screens. On the landlord's claim, the tenants had removed the shower panels to allow for better accessibility for Mrs Pett. The landlord's evidence is that the tenants did not reinstate the shower panels and that in addition, of the panels left on the property, there was one missing, so they could not be reinstated at all.
2. There is a significant dispute between the tenants and the landlord as to the number of panels that originally constituted the shower screen. The Tribunal at first instance stated:

After considering all of the evidence, it is not necessary for me to find whether the shower screen comprised of 2 or 3 glass panels as the tenants admitted they failed to reinstate the original shower screens back in the bathroom where they were when the tenancy commenced, the tenants having caused them to be removed, whatever number of shower screens there were at the time, in order to install a wheelchair access shower. [emphasis added]

The Tribunal found that removing the panels and failing to reinstate them at the end of the tenancy was a breach of the lease, regardless of the number of panels that comprised the screen in the first place.

1. The tenants disputed this. Mr Pett submitted that the number of panels originally constituting the shower screen is entirely relevant as the agents claim is that the tenants lost a third panel and that due to this, the entire shower had to be replaced as they could not reinstate the shower to its original condition. The tenants' position is that the shower only had two panels to begin with and so, even though they agree that they did not put them back at the end of the tenancy, they should not be liable to pay for the replacement of a new shower.
2. The difficulty with the Petts' argument is that it is premised on an assumption that the Tribunal at first instance ordered compensation for the shower screen such that the tenants had to pay to install an entirely new shower. The details of this reasoning are set out below, however it is useful first to outline the tenants' submissions in relation to the shower.
3. The tenants submitted that when they first moved in, they did not identify anything wrong with the shower. They stated that there was one panel that was fixed and one that slid to the side. When they called a therapist to come to the house, the therapist suggested certain modifications that could be made to increase Mrs Pett's mobility. The tenants submitted that they put it an application to the agent for approval to remove the shower screens. The tenants submitted that if the agent and landlord had given permission and signed this form, then government-funded services would have performed the work on the shower free of charge. However, the agent and landlord did not sign those off and so the modifications did not occur. Mr Pett submitted that he ended up taking the panels off himself because they were defective and dangerous. This conclusion was drawn from the fact that one panel was fixed to the floor. He placed them in a safe area, however did not replace them at the end of the tenancy due to them being dangerous.
4. Mr Pett submitted the landlord tried to claim $964 for the installation of a new shower and that this is what was awarded by the Tribunal in the original decision. However, this is not the case. The Tribunal member in the original decision did not allocate a specific amount for the shower screen. The Tribunal Member accepted Mr Dodd's report, which identified rectification costs for the whole of the house totalling $1243. When one deducts the quantified claims that the Tribunal Member awarded, it is possible to conclude that the Tribunal Member assigned a value of between $53 and $350 for the breach of lease relating to the shower screens. This point is made only to make it clear that the award was much smaller than the Petts thought. It does not follow that the Tribunal Member actually made a specific, but unstated, award. The Tribunal Member makes it clear that he has not quantified an award for each of the claims he found were compensable.
5. Mr Pett submitted that it was not a breach of lease to remove the shower panels as they had permission to do so. Mr Pett submitted that they did not remove the shower panels for wheelchair access, but rather because they were dangerous and becoming unstuck due to not being installed correctly in the first place. Mr Pett explained that he put in a maintenance request for the panels to be removed. He submitted that he was given permission to remove the panels to make the shower safe and that he was in his right to take them off as part of maintenance. The making of a maintenance request does not confer on the tenant a right to have it attended to. Even if it were reasonable for the tenant to remove the screens upon the landlord failing or refusing to attend to the request, it was incumbent on the tenant to reinstate the screens at the end of the tenancy. This is the basis upon which the Tribunal originally found the tenants to have breached their obligations, and this is the breach that was compensated. On review, despite being entitled to re-litigate this topic, I am not persuaded that the Tribunal reached the wrong decision on this issue.
6. It does not follow, however, that the Tribunal made an order for compensation in the amount of $964 as originally claimed by the landlord and agent. Whilst the Tribunal did not specify an amount, a careful reading of the reasoning suggests that the Tribunal made a much smaller award to compensate for the labour required to reinstate the screen in the manner that it had been when the tenancy commenced. Such an award is consistent with the finding regarding the screen and with the remainder of the Tribunal's findings. I affirm this aspect of the decision.

1. The Tribunal at first instance awarded the landlord $200 for carpet cleaning. The carpets were 20 years old. There were marks on the carpets noted on the ingoing report. The tenants undertook carpet cleaning at a cost of $100. To the extent that there were new marks, and irrespective of whether they were nail polish or something else, they were marks not capable of being removed by cleaning. Fair wear and tear incorporates such marks from time to time over the life of a carpet.
2. The landlord elected to replace the carpet at the end of the tenancy. On the invoice for the carpet replacement was a hand-written note "had to get new carpets, unable to sell with stains". There were marks on the carpet when the tenancy commenced. The tenants had the carpets cleaned. I am not satisfied that the tenants made the marks that were left after the conclusion of the tenancy or that such marks were not fair wear and tear given the life of the carpets.
3. I do not consider that the landlord established that the tenants were liable to compensate her for carpet cleaning. I will set aside that aspect of the decision and make no award for carpet cleaning.

1. The Tribunal in the original decision awarded the landlord $250 for repairing a small hole in a bedroom wall. The Tribunal Member found that some damage was caused when the door knob made contact with the wall when the door was opened, and that although the tenants were not liable for this as they would not have been aware, the tenants were liable for allowing the damage to worsen once they became aware of the defect and for patching the hole poorly. There was evidence that the tenants had attempted to patch the hole and Mr Pett stated that this small task had not been able to be completed notwithstanding an offer to do so as the task was interrupted by carpet cleaning at the end of the tenancy and he was not permitted to return to the property after the tenancy concluded. The tenants submitted that in the circumstances no award should have been made.
2. In his report of 27 September 2017 and in his evidence at the internal review, Mr Dodd's evidence was that he had not seen the original damage but that the patching job was inexpertly done and required re-work. He was clear and adamant about that during cross examination by Mr Pett. I accept Mr Dodd's evidence. The tenants on review did not persuade me that this aspect of the decision was wrong. Noting Mr Dodd's qualifications as a builder, I uphold the award of $250 for this repair.

The other claims for compensation based on Mr Dodd's Report

On the whole, I accept the report from Mr Dodd 27 September 2017, noting that he rejected some of the claims by the landlord on the basis that they were otherwise fair wear and tear.

The history of that report is significant to the proceedings. Initially, Mr Dodd produced a report for the agent without having seen the ingoing and outgoing inspection reports. During the original proceedings, Mr Dodd's evidence was that his views might be different if he had seen those reports. In the end, it was not markedly different.

1. After the hearing, parties were permitted to submit further documents for a period of time. Mr Dodd sent a further document dated 3 August 2018 (wrongly dated as 3 October 2018) in which he briefly elaborated upon his views about the shower screen, and confirmed his views about wheelchair damage to walls and frames. This email is not referred to in the original decision, so it is unclear as to whether the Tribunal considered it when the decision was made on 20 September 2018. However, the addendum contains no concessions or other information favourable to the tenants. I do not consider that the failure to refer to that addendum report reveals a flaw in the original decision.
2. The tenants had an opportunity during the internal review hearing to cross-examine Mr Dodd on his report and his elaborations. The tenants also made written submissions on Mr Dodd's report and the reasons why it should not have been so heavily relied upon by the Tribunal at first instance.
3. Mr Dodd did not resile from his views under cross-examination. Nor were they shown to be flawed.
4. There has been considerable evidence as to whether various marks on the walls and frames were wheel-chair caused, fair wear and tear, and whether they pre-date the tenancy. In the face of the differing views about this, I consider it appropriate to refer back to the ingoing and outgoing inspection reports. The outgoing photographs do not adequately address this issue.
5. Of the landlord's claim for $2,315, the Tribunal's findings were as follows:

Hole in the wall $250 - accepted and awarded as claimed

Shower screen - accepted in relation to reinstatement not replacement, unspecified amount awarded

Front door and frame - accepted, quoted $110, unspecified amount awarded

Entry hall way walls - accepted, quoted $110, unspecified amount awarded

Pantry door frame - accepted, quoted $44, unspecified amount awarded

Chips and gouges to walls throughout - accepted, quoted $220, unspecified amount awarded

Sliding screen door to lounge - accepted, quoted $220, unspecified amount awarded

Bedroom 3 wall damage - accepted, quoted $360, unspecified amount awarded

Polished door frames - accepted, quoted $99, unspecified amount awarded

Bathroom towel rail - accepted, quoted $160, unspecified amount awarded

The total value of the items in Mr Dodd's report that were not specified in the decision was $1,223. It can be inferred from the decision that the Tribunal accepted these claims. The Tribunal also expressly accepted $250 for the repair of the hole in the wall, and $200 for carpet cleaning. These amounts together are $1,823. An unspecified amount was awarded for the shower screens. The Tribunal awarded $1500 in total. The award was described as being 'holistic and without applying any strict mathematical formula'. It is evident that the Tribunal Member has made a generalised deduction from the claims made, because they amount to more than $1500 even without the shower screen cost. There was no submission before me from the landlord or the agent that the amount was insufficient.

1. In claims for inconvenience or other grounds of compensation not referable to a rectification cost, a round figure will be necessary. Where compensation is awarded on the basis of loss or damage the rectification of which has been costed, it is usually helpful to the parties if the Tribunal identifies components of a total assessment. However, it is open to the Tribunal to make global or 'holistic' awards that reflect what the Tribunal considers to be a fair award of compensation irrespective of whether it matches quoted rectification costs. In so doing the Tribunal brings to bear its extensive experience in assessing matters of compensation following a tenancy's end.
2. In this case, it is evident that the Tribunal Member has largely accepted the landlord's claims but has made a reduction to arrive at what he considered to be a fair amount. In respect of the carpet cleaning, I consider that an award should not have been made. As the Tribunal made an express award in that regard, I will vary the order to that extent. I would not have made an order for the whole of the amount claimed for chips and gouges to the walls or for the whole of the amount for bedroom 3 wall damage. It is not evident whether the discount that the Member made was in respect of these matters. It is evident that the Tribunal has only made a small allowance for labour for replacement of the shower screen. I agree with that. I am satisfied that, apart from the carpet cleaning, the Tribunal has reached the correct and preferable decision in relation to the landlord's claim.
3. In so doing, I find that the ingoing inspection report coupled with Mr Dodd's observations provide a basis for compensation for marks to walls and frames. The tenants submitted that if Mr Dodd could be shown to be wrong about the cause of some of that damage being a wheelchair, or if they could show that the landlord herself had used a wheelchair, the claim for certain damage to walls and frames would be negated. However, Mr Dodd's report identified greater damage (however caused) than that which was indicated on the ingoing inspection report. Although Mr Dodd conceded that he did not know when the damage was caused, the ingoing inspection report did not support the tenants' theory that the wall and door-frame damage pre-dated the tenancy (except insofar as was indicated on the report).
4. The Tribunal's finding that such damage should be compensated was the correct and preferable decision.

1. The tenants' cross claim was for $12, 318. In the original hearing, it was rejected in its entirety.
2. $2400 was for excessive rent. The Tribunal found no basis for this, without elaboration. Section 56 of the RT Act provides that a tenant may declare that the rent payable under a residential tenancy agreement is excessive. The section proceeds to set out the factors that the Tribunal must consider in determining that matter. If the Tribunal finds, having undertaken the exercise of considering the evidence before it as to those relevant matters, that the rent is excessive, it may make certain orders. Importantly, whilst the Tribunal can fix a rent payable for the property and vary the residential tenancy agreement to reflect the new figure, the date from which the variation takes place must be after the date of the application to have the new amount declared. In this matter, the Petts' application for a declaration of excessive rent was made after the tenancy ended. There can be no order fixing the new rent prospectively, because there is no enduring tenancy agreement to which it can attach. This aspect of the tenants' claim cannot succeed.
3. The tenants submitted that the Tribunal should issue fines to the landlord and/or the agent for various conduct that was alleged to be in breach of the RT Act. The Tribunal is not a court and is not empowered to make findings of criminal liability or to issue fines or other penalties.
4. The tenants also made various claims for monetary amounts in the nature of litigation expenses such as mileage, parking and labour costs for correspondence, reviewing the landlord's documents and preparing for the hearings. The Tribunal is a no-cost jurisdiction in respect of tenancy disputes except in particular circumstances not relevant to this matter. All of the itemised claims under item 14 at page 10 of the 11 page document dated 8 November 2018 are rejected and will not be the subject of an award of compensation.
5. The tenants' allegations of fraud, contrivance, scamming and lying against the landlord and the agent were without basis. Their criticism and allegations of bias and lack of expertise of the witness, Mr Dodd, were unsupported by the evidence before the Tribunal.
6. The tenants' manner of approach, particularly the provision of documentation and the making of submissions that were disproportionate to the value of the dispute, protracted the resolution of this matter, but I am satisfied that the matters have been properly resolved.

1. I vary the order of the Tribunal made on 20 September 2018 in matter 2017/SH012644 such that the landlord is entitled to the sum of $1,300 of the bond No 4080445-6. As the bond has been paid to the landlord in the sum of $1,500, the landlord shall pay the sum of $200 to Housing SA.