YAO v KMSAC Pty Ltd ACN 127 493 172 & ANOR

…………………….. Member M Hanna AUSTRALIAN CAPITAL TERRITORY ) CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 823 of 2025

BETWEEN: YU YAO Applicant AND: KMSAC PTY LTD ACN 127 493 172 First Respondent UNILODGE Australia Second Respondent

TRIBUNAL: Member M Hanna DATE: 31 October 2025

ORDER 1. The application XD 823 of 2025 is dismissed.

2. In relation to application RT 588 of 2025, the Tribunal orders that the respondent pay to the applicant the sum of $10,074.54 within 14 days of these orders, that sum consisting of the following: a) $9,000 compensation for breach of the occupancy agreement. b) Rent from 21 March 2025 to 4 April 2025 in the amount of $431.54 [conceded mid-hearing by the respondent]; c) $350 consisting of 50% of the $700 cost of the Airbnb claimed. d) $100 for compensation for the items the respondent admits having lost whilst under its care [conceded by the respondent mid-hearing]; e) $183 for the filing fee. f) $10 in search costs.

………………………….. Member M Hanna REASONS FOR DECISION 1. The applicant, Ms Yao, filed two applications in relation to the same events. One was an application seeking relief under the Residential Tenancies Act 1997 (“the Act”). The second was a civil application seeking compensation under the Competition and Consumer Act 2010 - Schedule 2 The Australian Consumer Law (“the ACL”).

2. By means of these two applications, the applicant sought orders for compensation from the respondent, a company that owns and operates UniLodge, where Ms Yao was residing while she studied at University of Canberra. The compensation she sought related to incidents that occurred at the premises operated by the respondent where she resided.

3. Because the applications both relate to the same set of facts and circumstances, the matters were heard together on 14 August 2025 in accordance with Section 56(a) of the ACT Civil and Administrative Tribunal Act 2008.

4. In respect to both applications, Ms Yao requested the same orders: “1. Award compensation Unildoges’s [sic] breach of contract: rent from 21 March 2025 to 4 April 2025 ($431.54) and cost of living in another accommodation out of pocket ($700) 2. Award damage (psychological harm and academic decline) $9,025 3. Reimburse ACAT application fee $183 AUD 4. Compensate for four missing items in my belongings $100 5. Search fees $10 Total compensation sought: $10,449.54” Basis of the claim

5. The applicant was an occupant at UniLodge and student at the University of Canberra, a student residence owned and operated by the respondent. Her ambition was to graduate with grades sufficiently high to be invited to do honours, and at the time the events which are the focus of her applications occurred, she evidently had the grades to achieve that goal. The applicant outlined a history of complaints to the respondent’s staff requesting assistance with the noise of other students in the UniLodge premises which caused her sleep deprivation and interfered heavily with her study. There was no dispute that these had been made, nor was there any dispute that she herself followed the rules and was a model occupant in that she was considerate of others and even polite in the manner in which she complained about other student noise.

6. Events surrounding the noise eventually led to an incident on the night of 21 March 2025 after which Ms Yao was accused of threatening other students with a knife, moved from the room she was in to one far away and placed under various restrictions in terms of her movements. The events that led to this incident, the move to the third room, and subsequent investigation that eventually led to Ms Yao’s occupancy being terminated are the subject of her two applications to this Tribunal for which she seeks compensation.

Background

7. The evidence indicates that Ms Yao first signed and was party to an occupancy agreement between the two parties signed on 19 January 2025 for Room D011. Ms Yao filed a number of complaints about noise from other occupants disturbing her between 2 February to 7 February 2025. Eventually the respondent proposed to her that she be moved to another room and she agreed. On 10 February 2025, Ms Yao was moved to room D014 and a second agreement, similar in wording to the first was signed on 10 February 2025 for Room D014.

8. Between 21 February-18 March 2025, Ms Yao suffered further disturbances (about noise and hygiene issues) from other students and made further complaints to UniLodge Administration. Room D014 was situated near the kitchen where students, she submitted, were often loud and disruptive at all hours of the night.

9. One night, on 21 March 2025 the applicant complained twice to the respondent at around 1am, that there were loud noises coming from a group of students in the kitchen. She went out twice to the kitchen try to quiet them down. There is no evidence before the Tribunal that she was anything other than polite and respectful in her language when she spoke to the students.

10. On the last occasion, Ms Yao also used the opportunity to search for an implement that she could use to repair her yoga chair that she needed for an online yoga class that was scheduled for 3am [the class was conducted live online at that time by a Yoga instructor living in the United States]. Having searched for various implements, which included a knife, she claimed to have then given up on that quest and returned to her room, resigned to having failed to stop the noise or even found a way to repair the chair. She deposed that after returning to her room she was soon disturbed by security and police.

11. The applicant was interviewed by police and asked whether she had threatened the other students with a knife, a claim which she vehemently denied and continues to deny.

12. An ACT police report dated 02:30 on 21 March 2025 indicates that “Police were unable to substantiate any offences”.

13. Subsequent to the police interview, the respondent moved the applicant to another room (#0911). She says that she was told that it was “just for one night”. That claim was not challenged by the respondent.

14. Next day however, she found out that the move to Room #0911 was in fact permanent. Further she was ordered, that to get her belongings or go to her contracted room, she was required to be escorted by security a condition she found upsetting, demeaning and in her view, unreasonable. It was clear to her that she was now viewed as a threat.

15. The applicant objected and insisted on returning to her room [D014] which, though noisy, was her contracted room. She did not want to be escorted by security to get belongings and felt she was being treated as a pariah when she had done nothing wrong.

16. The respondent refused her request to return to her room [D014].

17. The applicant says that between 24 March 2025 and 10 April 2025, she engaged in disputes with the respondent over the legitimacy of removing her from her room and access to her belongings which was only available with security accompanying her.

18. On Friday 28 March 2025, the Residential Life Manager informed her that the incident was being treated as: “a case of serious misconduct, you will only be allowed to move your belongings with UC Security accompanying you. A breach notice will be issued, and this matter may be considered a case of serious misconduct. Once we have a discussion, we will determine the best option for you regarding accommodation, as you will not be able to return to your previous apartment. Please note that one of the purposes of this meeting is also to hear your side of the story and explore how we can support you in this situation”.

19. The applicant told the residential manager that she wished to attend any meeting with her legal representative.

20. The Residential Manager wrote on 28 March 2025 at 13:12: “I was informed by our General manager that this meeting cannot be attended by any legal representative [UniLodge’s underlining] … as this would require us to have one present as well, which we believe is not necessary at this stage…Could you please confirm your attendance on Tuesday and the time?”

21. Ms Yao responded to the manager by email stating the circumstances of the incident, that she requested the students “to lower their voices” and that they ultimately agreed and she returned to her room, but they did not leave or lower their voices.

22. An email from Ms Yao to UniLodge indicates that Ms Yao further informed the manager that she then called security again and went into the kitchen again where the students were now leaving. She says she picked up a knife, amongst other kitchen implements, to see if she could use them to fix her chair, but realised it wasn’t going to the job and put it back and went back to her room. Shortly afterwards the police arrived and said accusations had been made that she had threatened to use a knife to threaten others.

23. In the email she sent to the UniLodge manager, “I would like to ensure that any decision affecting my accommodation is made through a fair and transparent process which is my legal right. The lawyer agreed to come with me for the meeting. Thank you for understanding.”

24. The manager responded that the meeting is mandatory but “it cannot be attended by any legal representative.” [their bold lettering].

25. The applicant claims she was also denied access to the complaints or the ability to cross examine the complainants.

26. On 31 March at 3pm that afternoon the applicant, in total disagreement with the conduct of the investigation, suffering severe distress and angered by the way she felt her rights were being ignored, booked an Airbnb and moved into it, incurring a $700 expense in the time she was there.

27. Between 31 March 2025 - 2 April 2025, the applicant submits she suffered severe psychological distress. Her oral evidence indicates she attended psychological counselling on a number of occasions and by her own account, she felt suicidal because of: a) the accusations made against her; b) the fact that she could not have a lawyer assist her; c) was having to deal with her final assignments due on 2 April and 7 April 2025 respectively; d) having performed poorly in these assignments her grade average lowered to a point where she did not qualify for entry to honours.

28. On 14 April 2025 a breach notice was issued by UniLodge for prohibited conduct and another breach was issued on 2 May 2025 for arrears in payment of the occupancy fees.

29. On 20 May 2025 UniLodge issued Ms Yao a termination notice.

30. When the applicant did get to retrieve her belongings, she found they had been removed to another space and four items were missing.

Evidence

31. Apart from verbal submissions and the written applications, both parties largely relied on an email chain between the parties.

32. Unfortunately, no supporting medical, psychological or psychiatric evidence was tabled in the proceedings by the applicant.

33. Other parties that may have been helpful such as the students involved in the complaints, the University itself in terms of the report conducted ultimately were not subpoenaed.

Credibility

34. The applicant impressed the Tribunal as a distinctly honest and diligent person, for whom hard work and honour were of the highest importance and who used yoga as a means of calming and focusing her mind toward her study goals. The applicant’s testimony appeared to be honest, frank and sincere with no attempt to minimise her actions.

The Applications

35. There were two applications filed with ACAT. I will deal with each separately.

Civil Application:

36. In relation to her civil claim, the applicant submitted: “1. I was an international student under academic and psychological stress, with English as a second language, enrolled in five units and seeking help from UC counselling. UniLodge exploited this vulnerability by: 1) misleading me into vacating Room D014 under the information of a temporary one-night stay in Room 0911 as it was nicer and quieter; 2) restricting access to my contracted room and personal belongings under vague and unsupported “safety” concerns, despite no wrongdoing established by credible evidence; 3) denying me legal representation during a meeting related to my occupancy rights; 4) coercing agreement to move to Room H035 by imposing time limits, disregarding my stressful life situations; initiated allegation of student serious misconduct based on flawed, invalid and unreliable report. Under the Australian Consumer Law (ACL): • Section 18(1): A person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or likely to be. • Section 20(1): A person must not engage in unconscionable conduct. 2. Clauses 5.2(a)(ii) and 5.3 in the Occupancy Agreement, • Allow UniLodge to have unilateral power in deciding what conduct is “reasonable” and in the “best interests” of occupants. This may violate the consideration of “reasonableness” by law and “legitimate interests” of the occupants. • Do not require explanation by or consequence for the management if their actions are shown to be unreasonable; • Impose obligations on me (e.g. forced relocation) under threat of penalty or loss of access, with no corresponding safeguard or remedy for me. This agreement created a significant imbalance of rights and obligations, harmed me financially, academically and emotionally, and was not justified by legitimate safety concerns. The detriment included: emotional trauma, academic disruption, and loss of access to accommodation. Under ACL s 24(1), a contract term is unfair if: • (a) It causes a significant imbalance in the parties’ rights and obligations; • (b) It is not reasonably necessary to protect the legitimate interests of the advantaged party; • (c) It would cause detriment to the disadvantaged party if relied on. ACL s 25 gives examples of unfair terms, including terms allowing one party with unilateral rights, which are manifested throughout the Occupancy Agreement. Claims: 1. I respectfully ask the Tribunal to find that UniLodge’s conduct breached ACL s 18 and s 20, and to consider this in awarding compensation for the lost education value due to their unconscionable conduct. I suffered academic decline in unit Survey and research design and unit Group work. Subsequently, I lost the eligibility to get an offer in Bachelor of Science in Psychology Honors degree. Tuition fee for Survey and research design is worth 4512.5 AUD and Group work 4512.5 AUD. 2. I respectfully request that the Tribunal find these clauses to be unfair contract terms under ACL s 24 and s 25, and order they not be relied upon or enforced.” Findings in relation to the civil application:

37. The Tribunal reviewed the evidence that the applicant submitted but they were primarily her interpretation of the harm she had suffered. Section 35 of the Civil Law (Wrongs) Act 2002 states: 35. Mental harm—damages (1) Damages must not be awarded for pure mental harm to a person resulting from negligence unless the harm consists of a recognised psychiatric illness. (2) Damages must not be awarded for economic loss for consequential mental harm to a person resulting from negligence unless the harm consists of a recognised psychiatric illness.

38. No medical, psychological or psychiatric evidence was filed by the applicant nor documentary or oral testimony from a professional source.

39. In such circumstances, it is impossible for the Tribunal to assess any psychological distress caused, should there have been such. Further, without a causation link demonstrated between the respondent’s actions and the psychological damage, such a finding could not be made. Thus, the Tribunal has no choice but to dismiss the applicant’s claim for an “award damage (psychological harm and academic decline) $9,025.”

40. Ms Yao also submitted that the Occupancy agreement was oppressive. It is evident upon review of the Occupancy agreement signed by the parties, that the respondent had the power to move the applicant in the circumstances, even if the applicant were entirely innocent.

41. The agreement signed by the applicant clearly states: “If an allegation of violence…is made against me, or if I allege that I have been the victim of such violence, the Owner may allocate me alternative accommodation in accordance with the relevant provisions of the Occupation Agreement”.

42. Provisions outlined such as 10.2 of the agreement make clear that threats of violence are prohibited conduct.

43. The Tribunal finds the action of moving the applicant from one room to another, in itself, is not a violation of the occupancy agreement in the circumstances that occurred.

44. Further, the Tribunal does not agree with the applicant that the Occupancy agreement is unreasonable. The content in the agreement appears to be standard for an occupancy agreement and does not, in this Tribunal’s views, contain harsh or oppressive terms.

Application under the Residential Tenancies Act 1997

45. The applicant’s submission in relation to her claim under the Residential Tenancies Act 1997 primarily concerned her claim that the respondent had breached their duty to provide the occupant quiet enjoyment of her room and compensation in relation to the same.

46. The applicant also raised deep concerns in relation to what she claimed is a violation of the respondent’s duty of care to the occupant in relation to her safety – primarily that the respondent had failed to protect her legal right to a fair investigation regarding allegations made against her by the group of students that she threatened violence on the night of 21 March 2025 as well as the refusal by the respondent to allow her to properly examine the complaints made against her or cross examine the allegations.

47. As stated above, the Tribunal does not agree with the applicant’s view that the occupancy agreement was oppressive in relation to the powers of the UniLodge had to move her in circumstances where they saw reasonably fit (such as where she was accused of threatening with a knife). Similarly, it is evident that occupants do have clearly delineated duties and obligations under the occupancy agreement both in relation to their room and the common areas - which are outlined in considerable detail at Point 10 and 11 of the Occupancy Agreement. It is quite evident from these parts of the Agreement that student behaviour has to fit within the code outlined and not interfere with the rights of other students residing there.

48. The first and second respondents have the responsibility to enforce those duties and obligations. It also has a duty to the occupants to provide the occupant premises with quiet enjoyment.

49. The occupancy agreement between the parties guarantees quiet enjoyment: 3.2 Subject to clause 3.1(b), provided the Occupant complies with the obligations imposed in the Agreement, the Occupant will have the right to quiet enjoyment of the Room and to occupy the Room throughout the Term.

50. The respondents never refuted that the applicant repeatedly made complaints regarding noise of other students, from virtually the moment she moved into UniLodge all done in the fashion that is outlined in their rules. The applicant indicated she was unable to sleep, unable to properly study, to concentrate or enjoy the quiet enjoyment of her room whilst at the UniLodge premises.

51. The applicant argued that the lessor has a responsibility to ensure her right to quiet enjoyment, which means that she should be able to use and enjoy the property without unreasonable interference, including excessive noise.

52. She argued that the lessor had a duty of care that extended to ensuring the property is reasonably safe and habitable, which includes managing noise levels to allow tenants to study and sleep without undue disturbance and that the lessor should take reasonable steps to mitigate noise issues, which may involve setting noise restrictions, ensuring proper insulation, or addressing noise complaints from other tenants or external sources. It is evident that there was a failure to deal with the complaints from the applicant. Moreover, the respondent lessor made no argument whatsoever that the applicant’s complaints were gratuitous or excessive.

53. The applicant did not argue that "quiet enjoyment" was the sense of being free from noise. That in fact would be unrealistic in student accommodation. She did submit that her occupancy agreement gave her the right to have a room “free from interruption”.

54. In Xia v Wang & Bian [2009] ACAT 21, the Tribunal made the following comments at paragraphs 193 to 196: 193. The interference caused to the tenant’s use of the premises must be substantial and not trivial (Worrall v Commissioner for Housing of the ACT [2002] FCAFC127 but it does not have to be so severe as to deprive the tenant of the whole of the benefit of the tenancy (Hawkesbury Nominees P/L v Battik P/L [2000] FCA 185; Byrnes v Jokana P/L [2002] FCA 41). 194. The right to quiet enjoyment can be breached by the actions of a lessor falling short of an unlawful termination of the tenancy, but an unlawful termination is just the extreme case of a breach of quiet enjoyment, i.e. the whole the quiet enjoyment of the premises has been lost. A loss of quiet enjoyment is a matter of degree. 195. Thus by way of example in Davies v Cantoni [1998] NSWRT 41 and in Sheridan v Griffith [1999] NSWRT 22 the Residential Tenancies Tribunal in NSW held that unsuccessful endeavours by a lessors to coerce a tenant to vacate the premises were a breach of quiet enjoyment. 196. The right to quiet enjoyment is an absolute and therefore a breach of that right occurs whether or not the lessors intended to cause the breach (Worrall (supra); Coles Myer ltd v Volley Investments P/L [2003] WASC 254).

55. It is noted that Ms Yao did not enjoy a tenancy but an occupancy. However, the comments in paragraph 193 in particular are relevant to Ms Yao’s situation here.

56. In Shkolar v Thomson [2015] ACAT 21 the tribunal noted: 13. The right to quiet enjoyment is a right conferred on the tenant under the residential tenancy agreement and at common law. The common law covenant of quite enjoyment is implied into all residential tenancies agreements by reason of the existence of the landlord and tenant relationship. The basis of the covenant was explained in Kenny v Preen [1962] EWCA Civ 2; [1963] 1 QB 499. The basis is that the landlord, by letting the premises, confers on the tenant the right of possession during the term and impliedly promises not to interfere with the tenant’s exercise and use of the right of possession during the term. The tenant is entitled to have the full benefit of the right of use and possession of the premises. … 21. … the conduct of the landlord in serving a retaliatory notice of termination, and the conduct of the landlord’s agent in making the caustic comments described above resulted in an interference with the tenants’ quiet enjoyment of the premises. Their conduct is a form of harassment and harassment has long been recognised as a breach of the covenant of quiet enjoyment.

57. In accordance with Section 71C (1) (a) (ii) of the Act, under an occupancy agreement, premises are granted to the occupant for residential use as a home. The occupancy agreement provides that the grantor must not cause interference with the occupant’s quite enjoyment of the premises in accordance with Section 71EA (h).

58. This is fundamental to a primary purpose of the occupancy agreement – to provide a home for the tenant.

59. I am satisfied on the evidence before me that Ms Yao did suffer a loss of quiet enjoyment for the following reasons: a) That the applicant needed to make as many complaints as she did, all of which were acknowledged as genuine, followed correct procedure and polite, indicates that she felt uncomfortable and harassed in what was then her home. UniLodge advertises: “comfort, convenience and everything you need to feel at home”. The applicant did not and could not expect a monastic quiet, but she certainly wanted and had paid for the right to be comfortable in her room, able to study without disturbance and to co-exist in a safe, stable environment. b) UniLodge solved her complaints about noise and distraction in the first room by moving her to one arguably worse (next to a kitchen). Rather than mitigate the issue, it worsened the situation and ultimately led the events of 21 March 2025. c) The tribunal is satisfied that the events in the kitchen on the night of 21 March 2025 only occurred after a complaint regarding a group of boisterous students’ cheering and loud shouts at 1am in the night, right next to the applicant’s room. That is not “acceptable behaviour” as defined in the agreement the parties signed. d) The applicant was unable to properly sleep or study, and then ultimately felt the need to leave the premises and go elsewhere safe and quiet to try to study for her final assignments. e) The second respondent in particular has a responsibility to monitor and control the noise of other students and unruly behaviour. In short, the occupant did what was required and complained. The respondent failed to control the premises and other occupants adequately and failed to allow the applicant proper representation or procedural fairness in making its enquiries. f) The disturbance of the applicant’s quiet enjoyment was exacerbated by the conduct of the respondent in refusing to allow the applicant legal representation. Ms Yao perceived an apparent bias against her and the possibility of an inequitable investigation. To assist her position, she asked that she have legal representation present at her official meetings investigating the matter. This was refused. g) The respondents justified the refusal of her legal representation because it would not have one present at the meeting. There was nothing preventing UniLodge having a lawyer there - the applicant did not oppose such nor make any demand that the respondent not have one. In circumstances where a student felt her position was so tenuous that she needed a lawyer to speak on her behalf to even be allowed to remain on the premises, the refusal to allow such representation acted as a severe violation of procedural fairness and further ingrained the violations to her right to quiet enjoyment that she had already suffered. h) No assistance was provided to the applicant nor explanation of her rights, or guidance as to how she might get assistance with the investigation. Whether the second respondent had formed a view that the applicant was indeed guilty is uncertain, but the evidence indicates little assistance given to her. i) It is noted that the applicant claims she was also unable to view or cross examine the complaints made against her. Unfortunately, it is not clear from the evidence what role UniLodge may have had in that. j) The applicant, already at a cultural and language disadvantage, was put at a clear disadvantage in an investigation which ultimately led to her occupancy being terminated and for her character to be impugned. Proper management of the premises, allowing quiet enjoyment of her occupancy, would almost certainly have avoided the incident of 21 March 2025 and the subsequent violation of procedural fairness that she appears to have suffered.

Compensation

60. The Tribunal may make an order for compensation for loss caused by the breach of the occupancy agreement in accordance with Section 83 (d) the Residential Tenancies Act 1987.

61. A party who suffers damage as a result of a breach of contract by another party is entitled to an amount of damages which will, as far as possible, put the injured 1 party in the same position they would have been in had the breach not occurred. The innocent party must establish that the loss complained of was caused by the breach of contract and that the loss was not too remote from the breach. The rule in Hadley v Baxendale (1854) 9 Exch 341 is applied to determine which loss is recoverable. An innocent party may recover damages caused by a breach of contract if they are the types of loss that occurs in the usual course of events, or arise naturally from the breach, or where the loss complained of may be reasonably supposed to have been in the contemplation of the parties at the time they made the contract to be likely to result from the breach.

62. Damages for personal distress or pain and suffering are not usually awarded for a breach of contract, however recent decisions indicate that such an award is appropriate and proper where the contract itself promised peace, comfort,

1 Robinson v Harman (1848) 1 Exch 850 enjoyment or relaxation. Damages have been awarded for breach of contracts 2 relating to holidays and weddings.

63. In this matter, the respondent has breached an express term of the contract, a term which is fundamental to the agreement, and the occupant is entitled to compensation for that breach. The occupant was ultimately forced from her home, intimidated by the treatment she had received from the respondent to the point that she seriously considered serious self-harm and even suicide, refused the right to have legal representation, prevented from properly defending herself against accusations made against her, and suffered evident interference with her studies. The respondent is to pay an amount of $9,000 compensation.

ORDER 1. The application XD 823 of 2025 is dismissed.

2. In relation to application RT 588 of 2025, the Tribunal orders that the respondent pay to the applicant the sum of $10,074.54 within 14 days of these orders, that sum consisting of the following: a) $9,000 compensation for breach of the occupancy agreement. b) Rent from 21 March 2025 to 4 April 2025 in the amount of $431.54 [conceded mid-hearing by the respondent]; c) $350 consisting of 50% of the $700 cost of the Airbnb claimed. d) $100 for compensation for the items the respondent admits having lost whilst under its care [conceded by the respondent mid-hearing]; e) $183 for the filing fee. f) $10 in search costs. …………………………………. Member M Hanna

2 Jarvis v Swan Tours [1973] 1 All ER 71; Baltic Shipping v Dillon (1993) 111 ALR 289 Date(s) of hearing: 14 August 2025 Applicant: In person Respondent: Mr H Khan and J Schutterups authorised representatives