NT Civil and Administrative Tribunal awards compensation to Aboriginal tenants for uninhabitable housing
Various Applicants from Santa Teresa v Chief Executive Officer (Housing) [2019] NTCAT 7
Summary
The Northern Territory Civil and Administrative Tribunal (the Tribunal) has awarded compensation to Aboriginal tenants in the remote community of Santa Teresa over the Northern Territory government's failure to provide habitable public housing. Residents of 70 households in Santa Teresa brought the action against the Northern Territory government. In this decision, the first four of these cases proceeded to hearing, and the Tribunal awarded compensation in each case.
Facts
The Tribunal examined the four cases of Jasmine Cavanagh, Enid Young, Robert Conway and Clayton Smith (collectively referred to as the applicants). The applicants were selected on the basis that they were representative of the legal and factual issues affecting all 70 applications, and in the expectation that resolving these matters would supply a framework within which the balance of the proceedings could be more expeditiously resolved.
The respondent was the Chief Executive Officer (Housing), a body corporate created under the Housing Act 1982 (NT) for the purpose of entering into public housing tenancy agreements. Under the legislation this position is occupied by the CEO of the Department of Local Government, Housing and Community Development (the Department).
The applicants had first purportedly entered into tenancy agreements in 2010 or 2011 (2011 Agreements). Ms Cavanagh, Mr Conway and Mr Smith had purportedly entered into replacement tenancy agreements in 2017 (2017 Agreements).
Each of the applicant’s had initially sought orders for emergency repairs for a list of broken items, including blocked sewerage, leaking taps, exposed power points, broken tiles, faulty windows and doors and broken air conditioners. By the time of the hearing these repairs had been completed, and the applicants claimed compensation under section 122 of the Residential Tenancies Act 1999 (NT) (RTA) for the delay in repairs, and failure of the respondent to comply with their obligations under the RTA.
The applicants argued that the respondent breached its obligation to ensure the property was in a reasonable state of repair pursuant to section 57 of the RTA, and failed to ensure that the premises were habitable and met all health and safety requirements pursuant to section 48 of the RTA.
The applicants also argued that the 2011 Agreements and the 2017 Agreements were invalid as they were either not signed by the Department, inconsistent with the RTA, invalid pursuant to the principles of termination as set out in the RTA or otherwise void because they were unconscionable.
Under the scheme of the RTA, when a tenancy agreement fails the legislation prescribes an agreement on the terms set out in Schedule 2 of the RTA (Prescribed Agreement). The applicants argued that the Prescribed Agreement was also inoperative, being void for uncertainty. Accordingly, the applicants submitted that they were entitled to a return of their security deposits and compensation for overpayment of rent.
The Department counter-claimed for unpaid rent from the applicants from the date of the 2017 Agreements. It also claimed compensation for damage to the properties which it argued was caused by the applicants.
Decision
Validity of Tenancy Agreements
The Tribunal found that the written tenancy agreements entered into between the applicants and the Department were all invalid.
The Tribunal found that the 2011 Agreements executed by Ms Cavanagh and Mr Conway were invalid as they were not signed by the Department, and the 2011 Agreements executed by Ms Young and Mr Smith were invalid because both agreements contained clauses that were inconsistent with the RTA.
The 2017 Agreements were also found to be invalid. The Tribunal rejected the Department’s argument that by entering into the 2017 agreements, the applicants had consented to replacing the 2011 Agreements, pursuant to common law principles of termination. The Tribunal found that the common law principles did not apply as the RTA sets out an 'exhaustive code' by which a periodic tenancy agreement can be terminated.
As a result, the Tribunal found that the operative agreement between the parties was the prescribed tenancy agreement in Schedule 2 of the RTA.
The Tribunal found that this prescribed tenancy agreement was not void for uncertainty, as the applicants were aware of what rent they were required to pay, despite accepting evidence that representatives of the Department had failed to adequately explain terms of the agreement and the fact that that English was not the first language of the applicants. The Tribunal noted each of the applicants had attended some level of secondary schooling in English, which the Tribunal held was sufficient for each to be aware of the rent they had to pay. Accordingly, the applicants' claim for compensation for overpaid rent and the return of their security deposits was dismissed.
As an aside, the Tribunal also noted that the 2017 Agreements had been purportedly entered into after the commencement of proceedings, yet the Department had not notified the applicant’s legal representatives before contacting the applicants to execute the agreements. The Tribunal noted that this constituted a breach of the respondent’s obligation to be a model litigant.
Claim for Compensation – Section 122
All of the applicants were awarded compensation under section 122(1)(a) RTA for the Department's failure to comply with the terms of the prescribed tenancy agreement or an obligation under the RTA relating to the agreement.
The Tribunal held that the applicants had to satisfy relatively strict tests under the RTA to be entitled to compensation. To satisfy the claims under section 57, the applicants had to give notice as soon as reasonably practicable 'after becoming aware of the need for repairs or maintenance' and establish that the Department did not respond with reasonable diligence. Some claims were not established for this reason. There were often issues of evidence regarding when a maintenance request was made and in these cases the claim was dismissed.
The Tribunal also took a narrow interpretation of the requirement to provide ‘habitable’ housing under section 48 of the RTA. For the houses to be uninhabitable, the applicants had to establish that the state of the house was a 'threat to the tenant's safety, going to both structural and health issues.' This high threshold required the applicants to demonstrate that injury would occur through ordinary use of the premises. This meant that some claims of compensation were not established because the applicants did not prove that the damage was a threat to their safety. For those claims that were made out, the Tribunal awarded the following:
Ms Cavanagh
compensation of $1,041 for rent of 269 days, as the house was uninhabitable due to a leaking shower and blocked toilet (section 48 RTA);
compensation of $2,500 for her distress arising from physical inconvenience which was considerable and persisted for a relatively long period due to the leaking shower and blocked toilet;
nominal damages of $200 for the Department's failure to properly secure the house as required by section 49 of the RTA, as the house had no front door handle or lock. The Department held that though her house was burgled, there was no evidence of the loss Ms Cavanagh suffered due to this;
Ms Young
compensation of $4,735.80 for rent of 540 days, as the house was uninhabitable due to the failure to ensure air-conditioning in an area where summer temperatures often exceed 40 degrees (section 48 RTA);
compensation of $4,000 for her distress arising from physical inconvenience which was considerable and persisted for a very long period due to the lack of air-conditioning;
nominal damages of $300 for the Department's failure to repair Ms Young's back door and stove with reasonable diligence, as no evidence was provided of any economic loss or suffering (section 57 RTA);
Mr Conway
compensation of $1,000 the Department's failure to repair a leaking shower and damaged tiles, which meant Mr Conway had to clear water after each shower during a period of health difficulties, causing disappointment and distress due to this significant physical inconvenience for a period of 109 days (section 57 RTA);
Mr Smith
nominal damages of $100 for the Department's failure to install a smoke alarm. There was no evidence provided of Mr Smith's loss or damage suffered due to the breach (section 48 RTA); and
nominal damages of $200 for the Department's failure to properly secure the house as required by section 49 of the RTA, as the house had no front door lock. The Department held that though her house was burgled, there was no evidence of the loss Mr Smith suffered due to this.
The Counterclaims
The Department's counterclaims were dismissed entirely due to a lack of evidence. The Department's records regarding unpaid rent were prepared manually and produced on the first day of the hearing. Furthermore the Department could produce no policy or other evidence to confirm their accuracy. The Department also had no evidence, such as inspection records or condition reports, that the damage to the properties was caused by the applicants.
Commentary
While the action was brought by Santa Teresa residents only, the decision has broader implications for Aboriginal people in remote communities across the Territory. If rental agreements made with residents in other communities contain the same standard terms as used in Santa Teresa (which is likely), they may also be invalid for being inconsistent with the RTA. Those agreements would then default to the prescribed tenancy agreements in Schedule 2 of the RTA. As was the case for the applicants, this would entitle people in other communities to the protections provided by the RTA, including the ability to claim for compensation for properties that are not in a reasonable state of repair or not in habitable condition.
Similarly, where tenants in other communities have been signed up to new rental agreements those new agreements, and any rent increases they contain, may also be invalid. Again, this has implications for the potential liability of the government to repay overpaid amounts.
Two of the applicants, Enid Young and Robert Conway, have applied for leave to appeal some of the Tribunal’s findings. This includes the finding that the Prescribed Agreement was not void for uncertainty. They also submit that the Tribunal did not deal with the claim that the rental agreements are void for unconscionability – which may require the return of rent money purportedly paid under the agreements. They also argue that the Tribunal misconstrued the requirement to provide habitable housing in section 48 of the RTA. They say that habitable housing requires that housing meets contemporary standards of humaneness and reasonable comfort. This is broader than the meaning found by the Tribunal, which required the applicants to prove that the state of the house was a “threat to the tenant's safety, going to both structural and health issues”.
The full decision can be read here.
Daniel Kelly is Managing Lawyer at Australian Lawyers for Remote Aboriginal Rights and solicitor in the matter.