Residential Tenancies Act 1997 (ACT) s. 38, 83(a)

Schedule 1, Standard Residential Tenancy Terms clauses 42, 52, 53, 54, 55 and 57

Byrnes v Jokona Pty Ltd [2002] FCA 41

Irena Peters v Commissioner for Housing for the ACT [2006] ACTRTT6

Fenton, Neist and Baker v. de Andrade [1999] ACTRTT 21 Watson v. Douglas & Xavier [1999] ACTRTT23

Date of Reasons for Decision: 17 November 2010

CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 581 of 2010

1. That the Lessor pay the Tenants the total sum of $1,200.00 made up of $1,000.00 for compensation and $200.00 for electricity by instalments as follows:

1. $400.00 on 12th November 2010 2. $400.00 on 12th December 2010

1. A review of a rental increase under Clause 39(1) of the Standard Residential Tenancy Terms ('the Standard Terms'), Schedule 1, Residential Tenancies Act 1997 ('the Act'); 2. That any rent increase would only apply after certain repairs and/or installations were carried out;

1. Orders that the Lessor repair parts of the premises and/or install equipment as promised at the commencement of the lease; and

1. Compensation for breaches of Clauses 42, 52, 53, 54, 55 and 57 of the Standard Terms.
2. The initial tenancy of 2 Chowne Street, Campbell, ACT commenced on 12 January 2008 for one year to be followed by a periodic tenancy of '21 days to 21 days'. The problems that are the subject of the Tenants' Application to the Tribunal commenced on 28 April 2010 when the Lessor wrote to the Tenants 'confirming' a rental rate increase to $565 per week "effective 1 May 2010" and payable at the rate of $1,130 a fortnight in advance. The Lessor attached a 'lease renewal' for the Tenants' consideration.
3. The Tenants responded by email on 30 April 2010 seeking a meeting with the Lessor to talk about the rental agreement. The Lessor wrote to the Tenants on 18 May 2010 stating that as there had been no communication since his letter of 28 April 2010 he assumed that 'there are no issues'. He noted that the rental increase had not been deposited with the rental payments.
4. On 21 May 2010 the Tenants hand delivered a letter to the Lessor setting out in detail their issues with the increase suggested by him and offering to pay an increased rent of $1080 per fortnight 'while we negotiate the issues and their resolution'. The Tenants also noted that the required 8 weeks written notice for the rental increase to take effect had not been given to them by the Lessor.
5. The Lessor replied on 25 June 2010 stating that 'the increase to an amount of $1330 per fortnight is applicable effective 29 June 2010 (8 weeks from the original notice)'. The Lessor later acknowledged that there was a typing error in that email and the rental increase was only to $1,130 per fortnight.
6. The Tenants commenced the present proceedings on 9 July 2010 claiming compensation for the Lessor's breaches of various Clauses of the Standard Terms over three years in the following sums:
   • 2008 $3674.85
   • 2009 $6678.31
   • 2010 $2610.93
7. The Tenants vacated the property on 4 August 2010 and notified the Tribunal that they no longer sought orders for the Lessor to undertake the repairs and/or install equipment.
8. The claim for compensation for breaches of the Act and Standard Terms was heard by the Tribunal on 19 October 2010 and orders were made. Subsequently, the Tenants sought 'a written explanation of the orders made'. The findings and reasons follow.

1. Under Clause 38 of the Standard Terms a lessor must give a tenant 8 weeks written notice of an intention to increase the rent and include in the notice the amount of the increase and the date when the increase is to take effect. The Tenants correctly submitted that the Lessor's letter of 28 April 2010 did not fulfil these requirements as it did not state the date on which the increase was to take effect and did not give a period of 8 weeks notice. The letter of 28 April 2010 was not a valid notice of rental increase.
2. The Lessor's subsequent letter of 18 May 2010 did not fulfil the requirements of Clause 38 and his purported rectification of the invalid notice in his subsequent letter of 25 June 2010 was also invalid under Clause 38. A Lessor cannot subsequently increase the period of notice to validate an invalid notice of rental increase. The Lessor needed to give the Tenants a fresh notice that fulfilled the requirements of Clause 38 which are: 8 weeks notice, specification of the date the increase is to take effect and of the amount of the increase. This the Lessor did not do.
3. Therefore, I disallowed the purported rental increase under section 67(b) of the Act. I note that the Tenants had not paid the increase so there is no order for a rental reduction or for compensation under this part of their claim.

1. I will deal with the Tenants' claim for compensation under Section 83(a) of the Act which provides that the Tribunal may make "an order requiring the payment of compensation for ... any ... loss caused by the breach of a residential tenancy agreement". I note Justice Allsop of the Federal Court of Australia in Byrnes v Jokona Pty Ltd [2002] FCA 41, in relation to the cumulative effect of nine categories of complaints of breaches of the covenant for quiet enjoyment in a commercial lease, said:

"104 In dealing with the various breaches I have born in mind that each matter should not just be looked at individually, but also collectively or cumulatively."

1. I will deal first with the alleged breaches of the Standard Terms by the Lessor then with the assessment of compensation, taking into account the collective and cumulative consequences of the breaches.
2. The Tenants claimed compensation for breaches by the Lessor of various clauses of the Standard Terms. They listed the following breaches:
   • Clause 54(1) - The Lessor failed to ensure the premises were in a reasonable state of repair at the commencement of the tenancy and failed to carry out repairs and/or install equipment he promised at the commencement of the tenancy as follows:
     • Latches for many windows not fixed and windows lacked flyscreens
     • Back door flyscreen and flyscreen on end bedroom not fixed
     • Waterproofing of shower floor and walls of ensuite not undertaken
     • Tiles on ensuite floor not replaced or made safe
     • Holes in main toilet wall not fixed
     • Air conditioner not fitted
   • Clause 42(c) - Laundry shared with 'back flat', but electricity not separately metered
   • Clauses 52 and 53 -
     • Laundry 'rearranged' by Lessor such that Tenants had to 'climb around things and juggle cords for various machines' and later the laundry sink was removed
     • Lessor removed Tenants' storage boxes and left them 'out in the weather'. The Lessor then filled the storage area with his things, removing that area from the Tenants' use for a period of months.
3. The evidence concerning each of the above alleged breaches is set out below.

1. In their Statement of Particulars, the Tenants claimed that many windows in the house had broken latches with the result that some could not be opened and one window took two people (one inside and the other outside) to close. This resulted in very little airflow through the house, making it stifling in summer. This was exacerbated by the lack of flyscreens to most windows.
2. In Attachment 2 to his Response, the Lessor stated that the problem with the windows was 'noted when the property was first tenanted'. He stated that a 'sample replacement' was provided to the Tenants within a month of the commencement of the tenancy but he only 'only recently' received verbal feedback that the sample was not correct. The Lessor said he would need access to the property to remove an existing latch to use as a template.
3. At the hearing, the Tenants said the windows were casement winder windows and many did not work and on some there was no winder at the commencement of the tenancy. The kitchen window was particularly difficult as there was no flyscreen and no winder mechanism; it was the window that needed two people to close it. The Lessor reiterated that he provided one replacement winder mechanism as a template and did not receive any feedback from the tenants. He agreed that he did not follow up. He said that the Tenants did not raise the matter with him again until their letter of 21 May 2010.
4. The Tenants said that it was agreed at the inspection prior to the initial tenancy that the Lessor would repair all windows. The Tenant, Mr Heinrich, was adamant that the lessor knew the template winder did not work as the Lessor came to inspect the property, but the Lessor denied he knew. The Lessor said that, after the Tenants vacated, the windows were all fixed using the same type of winders as the template. Both parties agreed that the windows in three rooms had worked throughout.

1. In their Statement of Particulars, the Tenants claimed that the flyscreen on the end bedroom door was partly off its hinges at the commencement of the tenancy, was difficult to open and was effectively useless as a flyscreen. It could not be left open in summer to cool the room.
2. The Tenants also claimed the back door flyscreen was in a 'terrible' state of repair at the commencement of the tenancy and had not been repaired. When the Lessor moved into the back flat in November 2009 he removed the flyscreen entirely. As the Lessor had previously removed the flyscreen from the kitchen window this meant it was not possible to open either the window or the door to cool the kitchen.
3. In his Response the Lessor stated that there had been difficulty in replacing the flyscreen on the kitchen door due to its age and odd size. An attempt had been made to repair the flyscreen where it was. The Lessor said he was unaware the flyscreen on the end bedroom door was non-functional; he said he was only aware of a problem with the lower hinge. The door could still be closed if needed.
4. At the hearing the Tenant, Mr Heinrich, said that the flyscreens to both the front and back doors were damaged and let in flies. He produced photographs of: a) the bottom edge of the front door flyscreen which showed a smallish tear in the netting on the bottom edge of the door; and b) of the kitchen flyscreen which showed large tears around two sides of the lower section and a tear along the lower edge of the top section. The photograph of the kitchen flyscreen certainly demonstrated that the flyscreen would be unable to keep out flies.

1. In their Statement of Particulars the Tenants claimed that very few of the windows in the property had flyscreens fitted at the commencement of the tenancy in 2008. The Tenants said that the flyscreens were at the side of the house "to be repaired". They were not replaced before they vacated. The Lessor did not deal with this part of the Tenants' claim in his Response.
2. At the hearing the Lessor said the flyscreens had been in the garage. Also, he found two of the flyscreens under a bush in the back garden. The Tenant, Mr Heinrich, said that he did not know anything about this. He thought that when the Lessor had said he would fix the windows at the initial inspection in 2008 this had included the flyscreens. The Lessor said that the flyscreens had not been raised at the initial inspection and he only learnt of the problem after these proceedings commenced. The problem was not reported by the Tenants during the tenancy.

1. In their Statement of Particulars the Tenants claimed that the floor of the shower recess had not been sealed, so they had to stand mostly on raw concrete when having a shower. Hygiene meant that the shower recess had to be cleaned with strong chemicals every few days. The walls of the ensuite were painted in non-waterproof paint which was peeling such that mould grew on them.
2. In his response the Lessor stated that this issue was discussed in 2008. He had told the Tenants that the rectification would involve a period of time when the shower would be unusable. He suggested that the Tenants notified him when they would be away on holidays and he would carry out the work then. The Tenants never notified him.
3. At the hearing the Tenant, Mr Heinrich, said that the problems with the ensuite were not raised at the original inspection as he only discovered them after he moved in. He reported the problems to the Lessor who agreed to fix them during a holiday period. Mr Heinrich produced a photograph of the shower recess showing a painted cement shower floor from about half of which the paint had worn away. In the photograph the walls of the shower recess were tiled. A photograph of two of the ensuite walls showed them to have mould growing on various areas. Mr Heinrich said the shower floor and the walls of the ensuite needed waterproofing.
4. At the hearing the Lessor said he had not agreed to repair the concrete shower recess floor, it was waterproof and was ugly but it did work. He also said he could not repair the shower or ensuite walls as both the Tenants never left the house together for a long enough period.

1. In their Statement of Particulars the Tenants claimed that cracked tiles in the ensuite had sharp edges, which could cut their feet. They stated they had pointed this out to the Lessor who agreed to fix the tiles. He did not do so. The Tenants covered that part of the ensuite floor with a rubber mat. In his Response the Lessor included the tiles within his response to the ensuite walls and the shower recess floor.
2. At the hearing the Tenants reiterated their points in the Statement of Particulars adding that only two or three tiles were involved. The Lessor said that only one or two tiles were involved, they were not cracked or broken at the commencement of the tenancy. He agreed that he had not fixed them.

1. In their Statement of Particulars the Tenants claimed that there was a hole in the corner of the main toilet wall and one at the ceiling which was embarrassing when people visited and may have been where an occasional rodent entered the house. In his Response the Lessor said this was the first notification he had had of this issue.
2. At the hearing the Tenant, Mr Heinrich, produced a photograph of a smallish hole in the corner of the walls of the toilet and a photograph of a small hole in the ceiling with a paper towel stuffed in it. Mr Heinrich said the Lessor had agreed to fix the holes at the initial inspection and had not done so. The Lessor said he had forgotten.

1. In their Statement of Particulars the Tenants claimed that in January 2008 the Lessor had said he had an air conditioner in the garage and he would install it in the house within weeks. He never did so. The cumulative effect of the lack of air conditioning and lack of flyscreens and of broken windows latches was that the house became unbearable in hot weather and the kitchen was unusable during hot days which led to the Tenants eating out more that they would normally have done, with additional cost.
2. In his Response the Lessor said that the air conditioner was not a condition of the lease not was it ever mentioned as such. Also, the Tenants never mentioned this issue during the tenancy until these proceedings commenced.
3. At the hearing the Tenant, Mr Heinrich, said that the Tenants suffered 124 days over 30°C during the 2½ years of the tenancy when the house was unbearable as a result of the combination of no air conditioning, no or damaged flyscreens and windows that did not open.
4. The Lessor said that the air conditioner was "just a suggestion he made", it was not a condition of the tenancy and he made no undertaking to install the air conditioner. He also said that he was never made aware of the combined effect set out in the above paragraph during the whole of the tenancy. The issues were not mentioned prior to the proposed rental increase or when these proceedings commenced.

1. In their Statement of Particulars the Tenants claimed that as the laundry was metered with the house for electricity, and was used by any tenant in the 'back flat' as well and was not separately metered during the entire 2½ years of the tenancy. They claimed that the Lessor had to pay for all electricity used during the 2½ years under Clause 42 of the Standard Terms as the cost of the electricity used in the laundry could not be clearly determined. The Tenants claimed the sum of $3,932.65 being the cost of electricity they said they had paid during the 2½ years.
2. The Tenants also claimed that there was no real problem with the laundry until the Lessor moved into the back flat in November 2009. They stated that the Lessor did his wash in hot water, which caused the hot water to run out on occasion and added to the cost of electricity. They claimed the Lessor also charged his large battery packs using the electricity from the laundry.
3. At the hearing the Lessor said that the house had a separate meter it was only the laundry that did not. The cost of electricity claimed by the Tenants included the house and the laundry. .

1. The Tenants stated in their written submissions that the problems with the laundry only started when the Lessor moved in, not for the whole 2½ years of the tenancy The Tenants claimed that the Lessor had 'rearranged the laundry making it almost unusable for months' and then when he fixed it up he removed the sink which had not been replaced. The power point was hanging off the wall and the dryer was not usable. The Lessor did all this without consulting or notifying the Tenants.
2. In his Response the Lessor stated that the laundry had always been a communal area with only one washing machine. When a second machine was installed in April 2010, the laundry became cramped and difficult to use. The sink was removed to allow the second washing machine to be installed. He agreed that a new sink has not yet been installed as he was 'sourcing' a bench. He denied the laundry had been unusable for months. He said the hot water tap to the new washing machine was not turned on and so no hot water was used by that machine. He said he could not explain the lack of hot water.
3. At the hearing both parties reiterated the content of their written submissions, the Lessor noting that the tenants' problems with the laundry only commenced when he moved into the back flat in November 2009.

1. In their Application the tenants claimed that the Lessor removed their storage boxes from the 'space next to their back door' and left the boxes out in the weather. He also filled the space with his possessions removing the storage area from their 'tenanted space'. The Lessor restored the space to them after their letter of 21 May 2010. The Tenants claimed they lost the use of the storage space for approximately 6 months.

1. Under clause 42(d) of the Standard Terms a lessor is responsible for the cost of all services for which there is not a separate metering device so that the amounts consumed during the period of the tenancy cannot be accurately decided. The Tenants claimed that, as the communal laundry was not separately metered, but was metered with the house, the Lessor should be responsible for all the metered services during the tenancy under clause 42(d). The Tenants claimed that they had paid $3,932.65 for electricity during the 2½ years of their tenancy.
2. I determined that as the house and the laundry were metered together it was the amount of electricity a tenant of the back flat used that was not separately known.
3. I accepted the Tenants' statement that their problems with the laundry only commenced in November 2009 when the Lessor moved into the back flat and used more electricity that the previous two tenants. As a result I ordered the Lessor to pay the Tenants the sum of $200 for electricity consumed by him during the time he used the laundry.
4. Under clause 54(1) of the Standard Terms at the start of a tenancy a lessor must ensure that the premises are fit for habitation, reasonably clean and in a reasonable state of repair. In relation to the breaches of clause 54(1), I accepted that most of the claimed breaches were of a minor nature.
5. Clause 55(1) of the Standard Terms set out the lessor's obligation to maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the tenancy. Clause 55(2) provides that a tenant must notify a lessor of any need for repairs.
6. There was no condition Report evidencing the state of repair of the premises at the commencement of the tenancy. Both parties did not seriously dispute a number of the Tenants' allegations about the state of the premises at the commencement of the tenancy. As the Lessor observed the house was 50 years old and a lower rent was charged than the median rent for the area to reflect this.
7. Clause 57 provides that a lessor must make repairs (other than urgent repairs) within 4 weeks of being notified of the need for the repairs by the tenants. In Irena Peters v Commissioner for Housing for the ACT [2006] ACTRTT the then Residential Tenancies Tribunal decided that a lessor's obligation to repair under standard terms 54 and 55 is framed in mandatory terms, i.e. the lessor "shall" maintain the premises in a reasonable state of repair. It is therefore not a defence to any landlord to plead that reasonable steps were taken to rectify either patent or latent defects. The test is whether these defects were in fact remedied such as to maintain the premises in a reasonable state of repair. This requirement applies to the Lessor's attempts to 'source' a sink for the laundry and in providing a single template window winder.
8. I also accepted the Lessor's submission that the Tenants did not raise a number of the breaches or need for repairs between moving in and their letter of 21 May 2010 to the Lessor raising their issues with the proposed rental increase. The Tenants have a duty to mitigate their losses under section 38 of the Act by not delaying seeking orders from the Tribunal to the point where a lessor is disadvantaged by the delay. The Tribunal notes that in Fenton, Neist and Baker v. de Andrade [1999] ACTRTT 21 and Watson v. Douglas & Xavier [1999] ACTRTT23 the Tribunal said at paragraph 64 that tenants "ought not...simply (endure) those conditions indefinitely". It is "open to the tenants to apply for orders compelling the lessors to comply with the tenancy agreement and to remedy [the] alleged default which is the subject of this application". The Tribunal further said:

'.... a tenant who permits defects to continue for eleven months, even with constant reminders, is likely to have failed to mitigate their own loss.'

1. Not only were no formal proceedings commenced by the Tenants (as one would expect if heat on the scale being claimed by the Tenants was being endured) but apparently there was no reporting or follow up of the problems to the Lessor until 21 May 2010. No evidence was produced of continuing complaints by the Tenants to Lessor concerning the heat in the house.
2. I therefore found that the Tenants came within the cases of Watson v. Douglas & Xavier [1999] ACTRTT23 and Fenton, Neist and Baker v. de Andrade [1999] ACTRTT 21 in that the Tenants allowed the hot conditions in the summer to continue from the commencement of the tenancy to 21 May 2010, a period of approximately 30 months, without applying to the Tribunal for an order that the Lessor undertake the repairs and/or maintenance to rectify the problems which gave rise to the heat in the house. The Tenants did not seek to engage a tradesman attend to fix the windows and flyscreens as they are entitled to do under Clause 61 of the Standard Terms. The Tenants failed to mitigate their own loss under section 38 of the Act.
3. The Tenants did not seek rectification the problems in the laundry nor report their difficulties to the Lessor and ask him to rectify the difficulties until 21 May 2010 after which the Lessor did rectify the laundry except for the lack of a laundry sink
4. Taking all the above into consideration, I ordered the Lessor to pay the sum of $1,000 compensation to the Tenants.

1. For the above findings and reasons the orders in this matter are as follows:
   1. That the Lessor pay the Tenants the total sum of $1,200.00 made up of $1,000.00 for compensation and $200.00 for electricity by instalments as follows:

1. $400.00 on 12th November 2010 2. $400.00 on 12th December 2010