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ACT CIVIL & ADMINISTRATIVE TRIBUNAL
MATHEW & ANOR v BARRANCO (Residential Tenancies) [2016] ACAT 102
RT 26/2016
Catchwords: RESIDENTIAL TENANCIES– internal flooding – whether premises were fit for habitation – question of fact – rent abatement – reimbursement of tenants’ alternative hotel accommodation costs – early termination of lease where premises not fit for habitation – interest up to date of decision
Legislation Cited: ACT Civil and Administrative Tribunal Act 2008 s 22Residential Tenancies Act 1997 Schedule 1, clauses 86 and 87
Subordinate Legislation cited: Court Procedure Rules 2006 rr 1619, 1620, schedule 2
Cases Cited: Finn v Finato [2004] NSWCTTT 179Kerr v Czeizler [1998] NSWRT 185Re: John Costello and Citra Constructions Ltd [1990] FCA 9Seaman and Tyne v Seerey [2010] NSWCTTT 376Sinclair c Candylios [1993] NSWRT 144Winder v Grehan [2013] NSWCTTT 247
Tribunal: President G McCarthy
Date of Orders: 2 September 2016Date of Reasons for Decision: 2 September 2016
AUSTRALIAN CAPITAL TERRITORY )CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 26/2016
BETWEEN:
MERSON MATHEWFirst Applicant/Tenant
LISJO MERSON Second Applicant/Tenant
AND:
JOE BARRANCO Respondent/Lessor
TRIBUNAL: President G C McCarthy
DATE: 2 September 2016
ORDERThe Tribunal orders:
1. The lessor pay the tenants within 28 days $7,598.57 comprised
of the following amounts:
(a) $4,970 for reimbursement of hotel accommodation for the period
24 September to 13 October 2015;
(b) $2,160 for reimbursement of rent paid for the period 14 October to
10 November 2015;
(c) $328.57 interest; and
(d) $140 for the filing fee.
.........................................President G C McCarthy
REASONS FOR DECISION
1. This application concerns the amount of compensation payable
by the lessor of a residential property to the tenants consequent upon the leased
premises becoming uninhabitable as a result of internal flooding.
2. Neither party provided a witness statement setting out what they
say occurred. Both elected to rely solely on documents that were provided
during the hearing. This caused deficiencies in the evidence on many factual
questions. The Tribunal has done the best it can with the evidence that it
received. Where there was some evidence in support of a proposition, the
Tribunal has considered that evidence in coming to a decision on the balance of
probabilities.1
3. On the evidence available, the Tribunal concludes the relevant
facts to be as follows.
4. On 30 July 2012, the applicants, Dr Merson Mathew and Ms
Lisjo Merson, (the tenants) entered into a lease agreement with Mr Joe
Barranco (the lessor) for the lease of a residential two-storey townhouse in
Bruce, ACT, for a six-month period ending 3 February 2013. The tenants lived
in the premises with their two children. The rent was $560 per week.
5. Commensurate with the rent, the Tribunal is satisfied that the
premises were of a high standard. On the evidence, the premises were
reasonably new. There were at least three bedrooms upstairs, at least two toilets,
a separate dining room, a separate lounge or living area, a separate kitchen, a
laundry, a garden, a double garage and a pool.
6. At the expiry of the lease, the tenants remained in occupation of
the premises on a month-to-month basis. The tenants had paid rent up to and
including 10 November 2015.
1 Re: John Costello and Citra Constructions Ltd [1990] FCA 9 at [30]
2
7. On 24 September 2015 at approximately 2:30am, a toilet valve
burst in an upstairs ensuite of the premises causing significant flooding. By the
time the tenants realised what had occurred, water had flooded both levels of the
townhouse. This occurred as a result of defective workmanship when the toilet
valve was installed prior to the tenants’ occupation of the property.
8. At 3:42am that morning, Dr Mathew sent an email to the
lessor’s agent advising he had been able to stop the water by turning off the
mains outside the house and that he and his wife were collecting water as best
they could using buckets and utensils.
9. According to a chronology provided by the lessor’s agent, the
agent advised the tenants ‘to stay at a hotel until habitable.’ The tenants acted on
that advice.
10. The flooding was more serious than had been appreciated
because later that day, 24 September 2015, a large portion of the downstairs
ceiling collapsed onto the floor of the downstairs lounge/living area. Electrical
wiring was left hanging from the ceiling support structure. The electricity circuit
for this room needed to be turned off. The lessor accepts this caused the laundry
to be without power because it was on the same circuit.2
11. On 24 September 2015 at 8.47pm, Dr Mathew sent an email to
the agent as follows:
The carpet cleaner only turned up at 7:30pm to do the survey. He would return tomorrow to dry up the carpets.
The ground floor ceiling has fallen.
We have moved to a hotel, but looks like this may take more than a couple of days to sort out.
12. On 25 September 2015, a cleaning agency sent an invoice to the
lessor’s agent for work done. This included moving all the tenants’ furniture and
2 Transcript of proceedings 5 April 2016, page 15
3
personal items from the second floor of the premises to the garage,
disassembling furniture and the use of ‘three blowers for four days at $25 each.’
13. On 29 September 2015, Landmark Plumbing sent an invoice to
the lessor’s agent referrable to a plumber’s attendance at the property on 24
September 2015. The invoice relevantly stated:
Attended site, found majority of the house to have severe amount of water damage throughout the ground floor gyprock roof and upstairs carpet caused by a faulty mini stop to the upstairs toilet. Replaced for a new quarter turn mini stop.
Believe this is a (sic) unsafe environment for the tenants to be living at this time until works are completed.
14. The lessor’s agent engaged a company, Syrus Works, to repair
the downstairs area of the premises caused by the flooding. According to a
chronology provided by the agent, the repairs were not completed until 22
October 2015. Replacement flooring in the lounge area was not completed until
December 2015.
15. On 22 October 2015, Syrus Works sent an invoice to the lessor’s
agent detailing the work done. The invoice included the following entries:
Supply and install new ceilings sheets to lounge area
Paint entire lounge area ceiling
Undercoat family/kitchen ceiling
Paint family/kitchen area ceiling
Property to be left in a best and tidy manner
16. On 7 October 2015 at 2:33pm, Dr Matthew sent an email to the
agent as follows:
Wonder if you could please advise us as to the status of the repairs. I shall be sending you the receipts for the hotel accommodations shortly. It is turning into a huge expense, and we are keen to see the repairs done as soon as possible so we can return home.
4
17. On 7 October 2015 at 2:41pm, the lessor’s agent sent an email in
reply as follows:
I sent through approval for Syrus to start work asap, he is going to call you asap to book in the job for Monday morning. Once the plasterboard is up you can move back in, you can organise that directly with a handyman. We will be going through body corporate insurance to claim all of this damage so you may not have reimbursement for a couple of weeks but I will try and get it sorted asap for you.
18. The tenants never returned to live at the premises.
19. On 9 October 2015 at 2:09pm, Dr Mathew sent an email to the
agent as follows:
Syrus still hasn’t made contact with us.
We would like to inform that we would be moving out of the property on 14th October (Wednesday).
We hope the landlord is agreeable to this and, if so, please advise us on the cleaning requirements and other end of lease formalities.
20. On 9 October 2015 at 5:10pm, the lessor’s agent sent an email in
reply as follows:
Thankyou for letting me know, the owner will be getting back to me on Monday as to whether he accepts your short notice term.
21. On 9 October 2015 at 5:16pm, Dr Mathew sent an email to the
agent that relevantly stated:
Thanks Sarah.
Please let us know the landlord’s position. Lis tells me that you had told her it was fine for us to move out at short notice.
22. On 15 October 2015 at 1:56pm, Dr Mathew sent an email to the
agent that relevantly stated:
Sarah
5
I haven’t received a response to the below email, so I have attached it here.
We have completed moving out of the property and have cleaned the house and the pool except where the wires are dangling under the broken ceiling.
23. The Tribunal did not receive any evidence of any
communication from the lessor’s agent to the tenant between 9 October and 15
October 2015 regarding the tenants’ proposal to move out on 14 October 2015.
The Tribunal is satisfied on the balance of probabilities that no communication
was sent.
24. On 15 October 2015 at 1:42pm, the lessor’s agent sent an email
in reply that relevantly stated:
Thankyou for your updated emails. I was unexpectedly away from the office from Monday - Wednesday so I have not been able to follow this up today.
Can you please advise if the work has started on the ceiling yet? It was suppose (sic) to start on Monday that I have not heard from the tradesperson yet.
The owner has advised me that he will not be accepting your short notice period to vacate the property and terminate the tenancy as of yesterday. He requires the standard 21 days notice to vacate, meaning your final day would be Friday 30th October and you will need to pay rent up to this day.
Can you please advise when you would like me to conduct your final inspection? You can still have access to the property for the rest of the month but no later than 30/10/15.
We will be claiming your hotel expenses on the insurance as I have previously mentioned to you. It should not take too long for a decision to be made with the insurance company however I cannot submit the claim until the ceiling is completed and I have the invoice.
25. On 16 October 2015 at 1:00pm, the lessor’s agent sent an email
to Dr Mathew that relevantly stated:
6
Thankyou. I am aware of what the Act says in relation to vacating and unfit for habitation. The owner is not willing to confirm anything until we know what his insurances will cover.
Please note that you will not be given any rent money back from when you were at the hotel unless you would prefer to be reimbursed rent rather than the hotel cost? You are only entitled to one not both. As mentioned, the owner will not be reimbursing you any cost until we know more about his insurance.
The property should be completely cleaned and grounds cleaned for your final inspection, please see attached the final inspection cleaning guide. Please note that the owner can also charge rent while you have keys and access to the property so if you have already finished all of the cleaning I would recommend to drop the keys into me asap.
26. The Tribunal infers from the agent’s emails sent on 16 October
2015 that Dr Mathew in some way communicated with the lessor’s agent,
perhaps by telephone, in response to the agent’s email sent on 15 October 2015.
The Tribunal infers that Dr Mathew did not agree with the agent’s position.
27. The tenants continued to stay in hotels in different places whilst
they waited for the repairs to be done. They had an expectation that the lessor
would reimburse their hotel costs after claiming these costs on the lessor’s
insurance but this did not eventuate. I deal further below with whether the
agent’s representations to the tenants oblige the lessor to cover these costs.
28. The tenants and their children stayed in hotel accommodation in
different places as follows.
24-25 September: Rydges Hotel, Canberra - $648
26-27 September: Aalberg Chalet, Jindabyne - $360
28 September-2 October: Mantra Hotel, Canberra - $1,380
3-4 October: Coachman’s Inn, Bathurst - $390
5-6 October: Pinnacle Apartments, Canberra - $458
7-13 October: Alivio Tourist Park, Canberra - $1,734
7
29. The tenants provided the Tribunal with receipts for this
accommodation. The lessor accepts these costs were incurred. They total
$4,970.
30. On 24 November 2015 at 5:20pm, Dr Mathew sent an email to
the agent that relevantly stated:
The owner is liable to pay us for providing us with emergency accommodation in lieu of the rent he has charged us for the period from when the house got flooded till the time we vacated having given notice as per our contract on the 14th of October, 2015. We demand that this amount be reimbursed to us immediately.
The amount is $6548.06.
Breakup is as follows.
Hotel emergency, accommodation ... - $5,214.15
reimbursement of excess rental paid from 14 October onward - $1334.41
We have waited more than two months for the owner to be able to sort out his insurance, but as there has been no effort on his part to reimburse our money, we are compelled to give this notice. The owner must pay us get reimbursed by insurance. You wouldn’t have liked it if we have refused to pay the rent.
If the owner does not pay us the money within 20 days ie 14th of December 2015, we would be compelled to apply to the ACAT. If this were to happen, the owner would be liable to pay us the above amount plus the ACAT fees, plus interest at the rate of 8% from when we started incurring expenses as well as subsistence expenditure.
Please understand that this would (sic) our last and final notice before we take this to the tribunal.
31. On the evidence before the Tribunal, the lessor did not respond
to the demand. The tenants filed their application for compensation on 8 January
2016.
The tenants’ claim for compensation
8
32. The tenants proceeded under an amended application dated 18
February 2016 which they sought a compensation payment of $9,684.54 made
up as follows:
(a) Hotel emergency accommodation for the period 24 September to 13 October 2015 - $5,214.15.
(b) Rental reimbursement for the period 14 October to 10 November 2015 - $2,160.
(c) Interest at 8%.
(d) ‘Subsistence’ for a 19 day period at $100 per day - $1900.
(e) ACAT filing fee - $140.
The lessor’s submissions on appropriate compensation
33. The lessor responded to each of these claims as follows:
(a) Hotel emergency accommodation - $0.
(b) Rental reimbursement 30 October to 10 November 2015 - $880.
(c) Interest at 8% - $0.
(d) ‘Subsistence’ - $0.
(e) ACAT filing fee - $0.
34. Regarding the refusal to offer any payment towards hotel
emergency accommodation, the lessor offered the following in lieu:
(a) 100% rent reimbursement when the carpet was drying (24-28 September
2015 (4 days) - $320.
(b) 20% rent reimbursement for ‘limited use of living room’ (29 September-30
October 2015: 31 days at $16 per day) - $496.
Consideration
35. The Tribunal deals with each of the tenants’ claims in turn.
Premises not fit for habitation
36. Clause 86(2)(a) of the lease, which mirrored clause 86(2)(a) of
the standard residential tenancy terms contained in Schedule 1 to the Residential
Tenancies Act 1997, entitled the lessor or the tenant on two days notice to
9
terminate the tenancy on the grounds that the premises were not ‘fit for
habitation’.
37. Likewise, under clause 54(1)(a) of the lease, the lessor was
required to ensure that at the start of the tenancy the premises were ‘fit for
habitation’.
38. In Finn v Finato3 at [18] – [19], the Consumer, Trader and
Tenancy Tribunal of NSW noted judicial statements regarding the words ‘fit for
habitation’ as follows:
18. The leading decision which guides the Tribunal in relation to this
standard of habitability is Summers v Salford Corporation [1943] AC 283
in which Lord Atkin said:
“If the state of the repair of the house is such that by ordinary user damage may naturally be caused to the occupier either in respect of personal injury to life or limb or injury to health, then the house is not in all respect fit for habitation..... it is clear that premises may be unfit for human habitation even though it is physically possible for a tenant to reside in the premises.”
19. In McLeish v FT Eastment & Sons Pty. Ltd (1970) 91 WN (NSW) 268 CA
the Court in reliance upon Proudfoot v Hart (1890) 25 QBD 42
considered the words “ fit for habitation” and “tenantable repair “ and
whether there was a difference. This is relevant to a consideration of
section 25(1) of the Act, which imports both concepts. The Court stated:
“must both import such a state as to repair that the premises might be used and dwelt in, not only for safety , but for reasonable comfort, by the class of persons by whom and for the sort of purpose for which, they were to be occupied.....(emphasis added)
The conclusion I draw... is that the landlord is obliged to hand the premise over to the tenant, at the commencement of the lease, in a reasonable state of repair having regard to its age, rent payable and the prospective life of the premises, and the state of the repair must
3 [2004] NSWCTTT 179
10
at least meet the minimum standard inherent in the contemporary understanding of the term “fit for habitation”. .... .(emphasis added)
39. From these statements, it is clear that whether premises are fit
for habitation is a question of fact, referenced to the nature and purpose of the
property, the class of persons using it and contemporary standards.
40. In Finn v Finato the tribunal concluded that the premises was
not fit for habitation because of the effects of rising damp, even though it was
physically possible for the tenant to reside in the premises. In several cases, a
tribunal has found a rental property not to be fit for habitation because of the
absence of a functioning hot water system.4
41. Safety is often a reason for why premises are not fit for
habitation. For example, a large hole in a balustrade5 or dangerous linoleum on
a kitchen floor6 have caused a tribunal to find premises were not fit for
habitation.
42. In this case, the lessor accepts that the premises was not fit for
habitation for four days while work was done to dry the carpet, but contends it
was habitable from 29 September 2015, subject to a rent reduction arising from
limited use of the living room.
43. Regarding use of the living room, the lessor’s agent contended:
You could still walk through the living area. You can still stand in the living area. You just don’t have any electricity and no ceiling.7
44. The lessor’s agent contended that for this reason a deduction of
20% is “quite fair.”
4 Seaman and Tyne v Seerey [2010] NSWCTTT 376; Kerr v Czeizler [1998] NSWRT 185
5 Winder v Grehan (2013) NSWCTTT 247 at [37] – [40]6 Sinclair c Candylios [1993] NSWRT 1447 Transcript of proceedings 5 April 2016, page 27
11
45. The Tribunal has difficulty with the proposition that a main
living area that does not have electricity, lighting or a ceiling is in any material
way usable for its purpose. That the tenants could walk through it or stand in it
is irrelevant: so too could the tradesmen engaged to do the repairs. The floor
was also damaged. The lessor’s agent informed the Tribunal:
Once the ceiling was done, it was noted that the floorboards were badly damaged then. So it ended up we had to replace the floors as well in the living area.8
46. The Tribunal is satisfied that the living area was completely
unusable.
47. However, the more relevant issue is whether the premises
generally were fit for habitation after the carpets were dried. Other factors are
relevant to that question.
48. First, the lessor’s agent informed the Tribunal that the laundry
was on the same electricity circuit as the lounge room, so that it too was
unusable at least to the extent that there was no lighting or electricity to run a
washing machine or a dryer. Dr Mathew contended that the kitchen was also on
the same circuit but that was disputed.
49. Second, although the ceiling had collapsed in the lounge room,
the invoice from Syrus Works for work done evidences that water damage also
occurred in the kitchen which needed to be repainted. It follows that the kitchen
too was unusable whilst this work was being done. The Tribunal recognises that
the kitchen was unusable only during the ‘window of time’ when the painting
work was being done, perhaps a few days, but the evidence shows ongoing
delay regarding performance of the work and consequential uncertainty as to
when the kitchen would be unusable.
50. Third, Landmark Plumbing, in its invoice dated 29 September
2015, informed the lessor:
8 Transcript of proceedings 5 April 2016, page 12
12
Believe this is a (sic) unsafe environment for the tenants to be living at this time until works are completed.
51. Fourth, the tax invoice from Landmark Plumbing evidences that
all the tenants’ belongings on the first floor of the townhouse were transferred to
the garage, so that none of the rooms on the first floor nor the tenants’
furnishings and belongings were usable in any practical way until these items
(for example the beds) were returned to the rooms on the first floor. There is no
suggestion of any endeavour to do this, nor correspondence that it had been
done. Nor do I accept that the tenants should have done this: the lessor removed
the tenants’ belongings in order to carry out repairs and the lessor should
therefore have returned them once the repairs were done. The Tribunal has
concluded that nobody gave consideration to the issue because the tenants were
staying in hotel accommodation whilst waiting for the necessary repair work to
be completed. It would appear that the garage was also unusable whilst it was
used as a storage area for the tenants’ belongings.
52. Fifth, on 7 October 2015, the lessor’s agent told the tenants that
they could move back in “once the plasterboard was up.” I take this to mean the
ceiling. This did not occur until after the tenants had vacated the property
because at that time the wires were still “dangling under the broken ceiling.”
53. Sixth, the lessor’s agent confirmed to the Tribunal that the agent
never invited the tenants to move back into the property, and certainly not from
29 September 2015 when the lessor contends the property was again fit for
habitation.9 The lessor’s agent contended that the question of inviting the
tenants to return to the property didn’t arise because the tenants gave notice to
vacate on 9 October 2015. This contention lacked any merit. It was inconsistent
with the advice the agent gave the tenants on 7 October 2015. It has no bearing
on the period 29 September to 9 October, during which the lessor now contends
the property was habitable. It was also disingenuous for the lessor to rely on the
tenants’ notice as a basis for not informing them that the property was fit for
9 Transcript of proceedings 5 April 2016, page 18
13
habitation and then, after the tenants had vacated the property with reliance on
that notice, maintain that the premises were fit for habitation.
54. On the evidence, the Tribunal concludes that the premises were
not fit for habitation at all times from 24 September to 15 October 2015 at least,
and probably not until 22 October 2015 when the repairs were completed.
55. For this reason, the tenants were entitled to give two days notice
of termination tenancy under clause 87(2) of the lease. It follows that the tenants
were entitled to give notice on 9 October to take effect on 14 October 2015. No
point was taken regarding the form of the notice and I have therefore not
addressed that issue. The question was whether the premises were not fit for
habitation when the notice was given. In circumstances where Tribunal is
satisfied of that fact, the tenants’ claim for reimbursement of rent for the period
14 October to 10 November 2015 is allowed.
Hotel emergency accommodation
56. Clause 87(3) provides:
If neither the lessor or the tenant give notice of termination of the tenancy, the rent abates for the period that the premises are unable to be used for habitation, but the tenancy resumes when they are able to be used again.
57. In this case, the question of rent abatement did not arise. The
Tribunal is satisfied on the balance of probabilities that the lessor’s agent
invited the tenants to find emergency hotel accommodation whilst repairs were
conducted on the basis that the lessor would reimburse the tenants for that cost.
I accept that implicit in the offer was that the hotel costs be reasonable. Also
implicit in the offer, was that the lessor would retain the rent paid. I accept the
agent’s submission that the tenants were ‘entitled to one not both’.
58. It is apparent from the email correspondence that it took much
longer to complete the necessary repairs than the tenants or the agent expected.
The cost of the tenants’ hotel accommodation from time to time and in place to
place therefore became quite significant.
14
59. The Tribunal is satisfied however that the tenants participated in
this arrangement in good faith, believing that these costs would be reimbursed.
The agent proposed this arrangement immediately following the flooding, and
the tenants accepted that arrangement to enable the lessor to repair the premises.
60. There is no evidence to suggest that the agent put any limit or
cap on the timeframe for this arrangement to continue. Rather, the ongoing
correspondence from the agent proposing that these costs would be claimed on
the lessor’s insurance policy suggests to the contrary. Having made these
statements, and the tenants acting on them in good faith, it was not open to the
lessor to renege on the clear indications that the tenants’ costs would be
reimbursed. The invitation for the tenants to take emergency hotel
accommodation at the lessor’s expense was never conditional on the costs being
recovered under insurance, nor was there any change to that arrangement over
time. For the lessor’s agent to say “I don’t think I ever said that it would
definitely happen”10 was to take a fine and unmeritorious point. On 7 October
2015, the agent said:
We will be going through body corporate insurance to claim all of this damage so you may not have reimbursement for a couple of weeks
61. The agent’s email cannot be sensibly understood as meaning
“we will reimburse you only if the lessor’s insurer will meet this cost.”
62. The tenants stayed in hotel accommodation, rather than choosing
other options available to them, on the understanding that the lessor would
reimburse these costs regardless of what options the lessor might have to recoup
these costs under insurance or otherwise.
63. I am left with the impression that the lessor at the very least
acquiesced in the tenants continuing to stay in hotel accommodation, rather than
terminating the tenancy as the lessor was entitled to do, in the hope that the
10 Transcript of proceedings 5 April 2016, page 22
15
repairs would be quickly completed and the lessor could then immediately
continue to receive rent under the tenancy.
64. Where the tenants’ needed to live elsewhere day after day for
more than two weeks without any indication of when repairs to the premises
would be completed, it is understandable that the tenants decided on 9 October
2015 that ‘enough is enough’ and gave notice to vacate the premises.
65. The Tribunal concludes for these reasons that the lessor should
be held to his agent’s promise and reimburse the tenants’ hotel accommodation
costs.
66. A remaining question is whether the costs were reasonable. The
lessor’s agent contends that they were not reasonable, where the tenants were
choosing to stay in Jindabyne and Bathurst. These costs, she said, “were just
personal use to get away”.11 The tenants said they stayed in these places because
they could not find suitable accommodation in Canberra.
67. The Tribunal concludes that the location of the hotel
accommodation is largely irrelevant. What matters is whether the costs were
reasonable. The reference point for that question is the reasonable costs of
accommodation in Canberra, commensurate with the standard of
accommodation that the tenants would otherwise have been able to enjoy in the
premises. As mentioned above, the premises were of a reasonably high
standard. Referenced against the standard of the leased premises, the Tribunal
concludes that all of the hotel accommodation was an appropriate standard and
at a reasonable cost, particularly where the accommodation costs elsewhere
were less than what might reasonably have been incurred had the tenants stayed
in Canberra.
68. In circumstances where the lessor retained the rent paid for the
period up to 14 October 2015, the Tribunal allows the tenants’ claim for their
11 Transcript of proceedings 5 April 2016, page 5
16
alternative hotel accommodation costs, noting however that the receipts for the
accommodation component total $4,970.
Subsistence
69. The Tribunal accepts that the flooding caused substantial
disruption for the tenants. For the family to be moving from hotel to hotel,
living out of suitcases, and generally not having the benefit of a home would
have caused significant inconvenience and expense.
70. The Tribunal is not persuaded, however, that the lessor is liable
to reimburse or compensate the tenants for this additional cost and
inconvenience. Unlike the hotel accommodation, there was no indication that
the lessor would reimburse the tenants for these costs, nor did the tenants seek
them in their initial demand. Also, the tenants elected to incur these costs, rather
than terminate the lease on two days notice, in the hope that they would soon
return to the premises.12
71. At hearing, Dr Mathew said “So we are not really applying the
law, but justice.” He agreed that the claim was based on what he thinks is a “fair
thing”.13 The Tribunal is not persuaded that it can allow any part of this claim.
That Tribunal must apply the law. The Tribunal cannot find any legal basis
upon which the lessor is liable for these costs, regardless of whether some might
consider reimbursement of at least some of these costs to be ‘a fair thing’.
72. This part of the tenants’ claim is disallowed.
Interest
73. The tenants also claim interest at the rate of 8% to the end of
March 2016, which they calculate to be $270.39.
12 The Tribunal refers, for example, to Dr Mathew’s email sent on 7 October 2015
13 Transcript of proceedings 5 April 2016, page 37
17
74. Under section 22 of the ACAT Act, the Tribunal has “in relation
to civil dispute applications, the same jurisdiction and powers as the Magistrates
Court.” These powers include the power to award interest up to judgment and
after judgment under rules 1619 and 1620, respectively, of the Court
Procedures Rules 2006 (the Rules).
75. For interest up to judgment, under rule 1619(1)(a)(i) of the
Rules, the Tribunal may set the rate of interest that “it considers appropriate”.
However, when doing so, rule 1619(5)(b) permits the Tribunal to set the rate of
interest “having regard to the rate of interest applying, from time to time, under
schedule 2, part 2.1 (interest up to judgment)” of the Rules. Under clause 2.2 of
schedule 2, the rate of interest up to judgment for a period after 30 June 2010 is
“the rate that is 4% above the cash rate last published by the Reserve Bank of
Australia” during applicable periods. In this case, at all material times the cash
rate was 2%.
76. The first question is whether interest ought be allowed at all.
The Tribunal is satisfied that it should. At all times from 24 September to 14
October 2015, the tenants behaved in a fair, co-operative and appropriate
manner. Dr Mathew’s email sent on 24 November 2015 stated a fair and
appropriate amount payable to the tenants in full satisfaction of this dispute. The
lessor should have paid this amount. Accordingly, the Tribunal orders the lessor
to pay simple interest of 6% on the amount payable from 25 November 2015 to
2 September 2016, being $328.57.
77. The lessor should also pay the filing fee in circumstances where
the tenants were successful on both aspects of their demand made on 24
November 2015.
Conclusion
78. For these reasons, the Tribunal will order the lessor to pay the
tenants within 28 days $7,598.57 comprised of the following amounts:
18
(a) $4,970 for reimbursement of hotel accommodation for the period
24 September to 13 October 2015;
(b) $2,160 for reimbursement of rent paid for the period 14 October to
10 November 2015;
(c) $328.57 interest; and
(d) $140 for the filing fee.
………………………………..President G C McCarthy
19
HEARING DETAILS
FILE NUMBER: RT 26/2016
PARTIES, APPLICANT: Merson Mathew and Lisjo Merson
PARTIES, RESPONDENTS: Joe Barranco
COUNSEL APPEARING, APPLICANT N/A
COUNSEL APPEARING, RESPONDENT N/A
SOLICITORS FOR APPLICANT N/A
SOLICITORS FOR RESPONDENT N/A
TRIBUNAL MEMBERS: President G C McCarthy
DATE OF HEARING: 5 April 2016
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