Southern Cross Community Housing Ltd v Geoffrey Macklan & Beryl Macklan

NCAT Consumer and Commercial|2014-02-03

APPLICATION 1The applicant as landlord and the respondents is tenants are parties to a residential tenancy agreement, which commenced 14 November 2011 in relation to premises in Cooma, NSW. 2The terms of the residential tenancy agreement oblige the tenant to pay rent on a fortnightly basis and water usage charges. 3On 19 November 2013 the landlords served upon the tenants a termination notice. The grounds for termination of the tenancy were breach of the agreement by the tenant by failure to pay rent and a failure to pay for water usage in accordance with the terms of the residential tenancy agreement. The termination notice required the tenants to vacate the premises on or before 10 December 2013. 4On 8 January 2014 the landlord filed an application to the Tribunal for a termination order based on those breaches of the residential tenancy agreement. The landlord also sought orders for the payment of arrears of rent and water usage charges. 5The matter was heard on 3 February 2014 and the parties negotiated and agreed settlement in relation to rental arrears and orders for the payment of $497.98 rental arrears by instalments of five dollars per week were made by consent. 6The Tribunal adjourned the matter with regard to the claim for payment of arrears of water usage and issued directions in relation to submissions from the parties on the time limit set out in regulation 22 in relation to applications pursuant to section 109 of the Act. 7Each party made submissions in accordance with those directions and the matter was next heard on 28 April 2014.

ISSUES 11The issue before the tribunal was whether the time limits set out in regulation 22 operated so as to prevent the landlord from making a claim against the tenant for water consumption charges relating to the following water charge periods: (a)22 August 2012 to 17 December 2012; (b)19 February 2013 to 17 April 2013; and (c)17 April 2013 to 23 August 2013. 12Section 190 of the Act provides that a landlord or a tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations. 13Regulation 22 of the Residential Tenancies Regulation 2010 provides that for the purposes of section 190 of the Act the prescribed period for making an application for an order in relation to a breach of a residential tenancy agreement is within three months after the applicant becomes aware of the breach. Section 139 (1) of the Act places upon tenants under a social housing tenancy agreement the obligation to pay to the landlord any charges for water usage, determined in accordance with guidelines approved by the appropriate Minister. The Ministerial Guidelines apply to tenancy agreements where the community housing provider is the landlord of social and/or affordable housing. Those guidelines provide that water must be charged separately from rent; and the community housing providers are to calculate the charge for water based on actual water usage. The guidelines make no reference to the timing of the levy of charges or the collection of water usage charges by the landlord from tenant. 14It is noted by the Tribunal that the Standard Residential Tenancy terms are based on section 39 of the Act, and this is not consistent with section 139, in so far as the Ministerial Guidelines allow community housing providers to levy water usage charges in relation to dwellings with shared meters. Section 137 of the Act provides that Part 7 of the Act - Social Housing Tenancy Agreements - will prevail over any other provision of the Act or the regulations in the event of an inconsistency.

EVIDENCE 15It was common ground between the parties that the tenants had not paid water usage charges as outlined above. The tenants gave evidence that they had not received the water usage accounts put into evidence by the landlord. The landlord provided copies of the relevant water usage accounts and gave evidence that they had posted copies of the water usage notices from the Cooma-Men are Shire Council with accompanying letters which stated the amount of water usage charges owing and the date by which each payment was due. The letter further stated "PLEASE NOTE FOR FUTURE REFERENCE THAT IF A WATER BILL IS NOT PAID BY THE DUE DATE, THEN THIS OFFICE MAY APPLY TO THE TRIBUNAL TO RECOVER THESE COSTS." 16There was no evidence before the tribunal of any application to the tribunal within the three month time period set out in Regulation 22.

SUBMISSIONS 17The landlord made submissions in relation to the applicability of the time limit set out in Regulation 22 which are summarised as follows: (a)that the regulations do not specify this "any timeframes for the payment of all the enforcement of overdue water bills"; (b)that the landlord has developed a water charging policy which requires the tenant to pay their water usage within 21 days of receiving the water account, but the policy does not specify any time frame for the enforcement of the debt; (c)that section 140 of the Act which provides that a tenant under a social housing agreement who has incurred a debt to the landlord must enter into arrangements with the landlord in accordance with any reasonable request of the landlord for the payment of the debt and that the tenants must comply with any arrangement; and (d)Regulation 22 does not apply to an application for the collection of amounts due for the usage of water pursuant to the residential tenancy agreement in social housing tenancies. 18The tenants' representative made submissions which are summarised as follows: (a)that s139 of the Act and the Ministerial Guidelines are relevant only to the way in which water consumption charges are calculated and say nothing of the manner in which unpaid water consumption charges may be collected or enforced; (b)that the landlord's water charges policy also only indicates the manner of calculation of water consumption charges and is silent as to collection or enforcement; (c)that it was the evidence of the tenants that they had not received accounts for water charges said to be due on 30 April 2013, 31 May 2013 and 30 September 2013; and (d)if the failure to pay by the dates set out in paragraph c above was a breach of the residential tenancy agreement then the landlord had not commenced the application for orders for the payment of those amounts until 8 January 2014 and this was more than three months from the date at which the landlord became aware of the breach or failure to pay accounts.

APPLICATION OF RELEVANT LAW 19The Tribunal did not accept the argument put forward by the landlord that section 140 operated to displace the time limits set out in Regulation 22 in relation to applications for orders relating to breaches of the residential tenancy agreement pursuant to section 190. 20Generally speaking limitation period runs from the date a cause of action accrues. The limitation periods within the Act vary. Time limits are designed to provide procedural fairness, ensure accuracy of outcome and provide finality to disputes. 21The assertion of all rights pursuant to legislation is governed by limitation periods. There is no evidence that the Parliament intended that there would be no limitation period for the collection of debts accruing from unpaid water usage charges in social housing tenancies. The Explanatory Memorandum to the Residential Tenancies Amendment Bill (Social Housing) 2005 makes no reference to the abolition of time limits in relation to the enforcement of the provisions relating to the payment of water charges by social housing tenants. 22If there were no time limit in relation to applications for the collection of debts accruing from unpaid water usage charges in social housing tenancies then social housing tenants would be subject to a great deal of uncertainty, and could be faced with very large debts as a result of an accumulation of unpaid water usage charges and lack of action by the landlord. 23The Act provides for remedies wherever there is a breach by one party of the residential tenancy agreement, and sets time limits for the commencement of applications in relation to those breaches. There is no inconsistency between section 139 and section 190. Both section 139 and the Ministerial Guidelines relate to the calculation and collection of water charges payable by social housing tenants. Section 190 provides that a landlord may make an application to the Tribunal for an order in relation to a breach of a residential tenancy agreement, provided that such application is made within the relevant time limit.

CONCLUSIONS 24The landlord had not commenced action in relation to the older water usage charges within the time limit set in the regulations. The landlord asked for an extension of time in relation to this application. The landlord explained that their policy was not to make applications to the Tribunal for the enforcement of water usage charges. This policy was said to be based upon a desire to avoid tenant data base services from listing the tenants as a result of their name appearing in the Tribunal hearing lists. The landlord further stated that because these were social housing tenants they were given every opportunity to pay their debts. 25The prima facie rule is that applications should be brought within the time set out in the legislation. The landlord did not provide an adequate explanation for the lack of action, or the delay, in relation to the recovery of the water usage charges. The Tribunal notes that the landlord had generated appropriate invoices and letters in relation to water usage charges and had indicated to the tenants that if the amounts were not paid by the due date action would be commenced in the Tribunal. There was no follow-up action in relation to the unpaid debt except for the application to the Tribunal, which is not within the time limit. The Tribunal therefore declines to exercise its discretion as set out in s 41 of the Civil and Administrative Tribunal Act 2013 (NSW) to extend the time for the making of the application. 26The most recent water usage account sent to the tenants, and remaining unpaid, fell within the time limits as set out in the regulation and the tenant is liable to pay the amount $78.60 to the landlord. J Lennard General Member Civil and Administrative Tribunal of New South Wales 17 July 2014 I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 September 2014

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