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]

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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

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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.

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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

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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:

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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

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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

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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

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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

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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

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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

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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

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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.

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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

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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

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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

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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:

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(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

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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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