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Bradbrook, Adrian J --- "Residential Tenancies Law - The Second Stage of Reforms" [1998] SydLawRw 17; (1998) 20 (3) Sydney Law Review 402

Residential Tenancies Law — The Second Stage of Reforms

ADRIAN J BRADBROOK[*]

1. Background

Residential tenancies law is a comparatively recent creation in Australia. Historically, normal principles of the common law of landlord and tenant applied to residential tenancies, and no exceptions in their favour were admitted by the courts. [1] Statute only intervened in the development of the law in isolated instances, [2] and in these cases applied equally to all types of tenancies.

This situation changed fundamentally in the mid-1970s after the publication of the two Reports of the Commonwealth Commission of Inquiry into Poverty (hereafter referred to as the Poverty Inquiry). [3] The reports documented the fact that the fundamental principles of landlord and tenant law had developed in the agricultural era of the eighteenth century. [4] These principles were then later applied to all categories of tenancies. The Inquiry concluded that the law had failed to adapt to take account of changing social times, in particular to the fact that most modern leases were taken in respect of buildings in urban areas, to which principles appropriate to agricultural leases had no practical relevance. The result was that the common law, as it stood at that time, produced many injustices, particularly to tenants. Numerous illustrations were cited: the lack of a repair obligation on landlords; the lack of a legal obligation to provide and keep the premises in a clean condition; the lack of control over excessive rents; the failure to apply traditional contractual principles such as mitigation of damages, frustration and repudiation; and inadequate safeguards in respect of assignment and subleases. [5]

The major recommendation of the Poverty Inquiry was the introduction in each Australian state and territory of new codified legislation specifically applicable to residential tenancies, designed to replace the common law. [6] The common law would continue to apply to other categories of leases. The following arguments were advanced in favour of new residential tenancies legislation:

(i) At common law, leases are recognised as an interest in realty. As such, the rules governing the relationship of the parties were developed out of the relationship that the tenant is given in the land itself. [7] In fact, modern residential leases have little relevance to the land. Such leases invariably concern buildings, or parts of buildings. Such buildings are, of course, also governed by real property law inasmuch as, by the law of fixtures, such buildings form part of the land. [8] Nevertheless, the fiction that the primary concern of a lease is the land itself produced inappropriate and unfair common law principles. [9]

(ii) In light of the fact that landlord and tenant law developed at a time when the vast majority of leases were taken in respect of open agricultural land, it is not surprising to find that the law did not concern itself with rights and duties affecting buildings designed for human occupancy, such as repairs, cleaning, rights of entry and security deposits.

(iii) Many injustices were produced by the failure of the common law in the past to recognise that a lease, despite being an estate in land, should be subject to normal contractual principles. [10] It was observed by American writers that tenants of residential premises could be likened to consumers, in the sense that they consume space and services. [11] It was also observed that compared with all other types of consumers, residential tenants had very few legal rights. [12] This was also true in respect of Australia after the enactment by both the Commonwealth and States of a plethora of consumer protection measures. [13]

(iv) The law of leases is based historically on the notion of caveat emptor, which places the onus on tenants to protect themselves legally by means of ensuring that appropriate clauses are included in the terms of the lease document. The Poverty Inquiry observed that it was fallacious to assume that potential tenants of residential premises had equal bargaining power with their landlords and could freely negotiate the terms of a lease. [14] In reality, printed standard forms of lease drafted by landlords or real estate agencies were presented to tenants by landlords or landlords’ agents on a “take it or leave it” basis, and no effective negotiation was possible.

The majority of the recommendations of the Poverty Inquiry were adopted in South Australia by the Dunstan Labor Government in the Residential Tenancies Act 1978 (SA) (now repealed and replaced by the Residential Tenancies Act 1995 (SA)). This was quickly followed by the Hamer Liberal Government in Victoria in the Residential Tenancies Act 1980 (Vic) (now repealed and replaced by the Residential Tenancies Act 1997 (Vic)). Following a hiatus of several years, similar reforms were introduced in the late-1980s in New South Wales and Western Australia, [15] and finally in the early-1990s in Queensland. [16] It is only in Tasmania and the two Territories that there is still no comprehensive residential tenancies legislation. [17]

Unfortunately, the new residential tenancies legislation is not uniform, and there are numerous substantive differences between the various enactments. Nevertheless, taken generally, the following reforms were introduced: the creation of a new specialist tribunal with exclusive jurisdiction to resolve landlord-tenant disputes; [18] the limitation of appeals from the new Tribunal; [19] a new system regulating the taking, holding and return of security deposits; [20] the outlawing of certain payments by tenants; [21] streamlined laws on termination of tenancies and the recovery of possession; [22] new controls on the disposal by landlords of the abandoned goods of tenants; [23] the establishment of new repair and cleaning obligations on both parties; [24] the creation of a system of control of rent increases and (in some cases) of excessive rent; [25] the application of a requirement that parties mitigate their damages; [26] and the new offence of refusal to grant a tenancy to a person on the ground that it is intended that a child should live on the premises. [27]

This may be referred to as the first stage of residential tenancies law reforms. Despite the fact that such reforms were politically controversial at the time and were bitterly resisted by real estate agents and landlords’ associations, they appear to have been accepted over time. Although in some states amendments have been made to the legislation following a change in government, in no case has the legislation been repealed and abandoned. [28]

Inevitably, the suggestions for law reform made by the Poverty Inquiry were watered down during the political negotiations and compromises leading up to the enactment of the existing residential tenancies legislation. Because of the novelty and far-reaching nature of many of the recommendations, many groups and individuals, particularly real estate agents, were deeply suspicious of the proposed reforms. For this reason the full range of reforms recommended by the Poverty Inquiry were never introduced into law in any jurisdiction. Proponents of law reform in this area, particularly tenants’ associations, have constantly agitated for further reforms. A further factor in the law reform process is that we now have almost twenty years of experience in the operation of residential tenancy laws in South Australia and Victoria, and in some overseas jurisdictions ever greater experience in this area. [29] For this reason it is submitted that it is timely to reconsider the existing state of residential tenancies law with a view to recommending the adoption of a second stage of reforms.

2. Theoretical Bases for Determining the Rights and Duties of the Parties

In any reconsideration of the respective rights and duties of landlords and tenants of residential premises we are faced with the difficulty that any benefit given to one party automatically confers a disadvantage on the other party. It is thus quite likely that law reform issues will be decided by the respective strength of the lobby groups and the political leanings of the government of the day. In large measure this is what in fact occurred in respect of the current residential tenancies legislation. This is clearly an unsatisfactory basis for law reform. In order to determine the appropriate terms of residential tenancies legislation, it is submitted that we should examine not only the respective interests of the parties, but also the relevant considerations of justice and the interests of society. Let us examine the factors relevant to law reform in this area under each of these headings.

A. The Respective Interests of the Parties

For landlords, investment in real estate represents one of a number of possible alternative forms of investment. In the case of other forms of investment, such as stocks and shares, an investor’s normal concerns are limited to earning a reasonable rate of return on the capital invested and ensuring that the capital itself is protected. Leasing of premises, especially premises designed for residential use, involves an additional human element, in the sense that the actions or lack of action of the investor (the landlord) inevitably affects the life of the tenant. It is this human element that complicates and confuses a consideration of the interest of landlords when examining the respective rights and duties of the parties. It is a sign of the lack of unanimity of opinion in society as to the relevance of the human element in the landlord and tenant relationship that has led to different legislative responses in different jurisdictions as to the parties’ rights and duties. For example, should the law (in the form of the residential tenancies legislation) take into account personal difficulties or hardships that the tenant might have in paying the rent on time, and if so, how should the law reflect these considerations? The matter only becomes straightforward if it is decided that such personal factors are totally irrelevant in determining and applying the law of landlord and tenant, and that a residential lease is purely a business relationship. Even in jurisdictions governed by parties of a conservative persuasion, it is unusual to find that the locally applicable landlord and tenant law excludes entirely the human factor. The differences in the applicable law usually result from the fact that the human element is given a greater emphasis in some jurisdictions than in others rather from the fact that it is ever totally excluded. It is this differing response that has produced differing legislation.

While it is true that investment in housing has to compete with alternative forms of investment which lack the human element, and that a conventional economic analysis would suggest that a consideration of the human element represents a deterrent for investors to invest in housing and also amounts to a social subsidy by landlords of tenants, the fact that landlord and tenant legislation excluding the human element is virtually non-existent suggests that the social element is an essential component of modern residential tenancies law and must be accepted as such by all interested parties. An acceptance of the proposition that the human element is relevant in residential landlord and tenant law is implicit in the initial creation of residential tenancies legislation, which recognises that residential tenants need greater legal protection than tenants of industrial and commercial premises. [30] The law is replete with provisions taking into account social factors in legislation relating to other sectors of the economy, such as hire purchase control, land transactions, door-to-door sales, bankruptcy and the division of property on divorce. [31] In light of the current shortage of housing in modern times in most industrialised nations, the problem of homelessness and the creation of a right to adequate housing by article 11(1) of the International Covenant on Economic, Social and Cultural Rights [32] as a human right, [33] it is submitted that this is the only responsible approach.

The appropriate conclusion to be drawn from this line of reasoning appears to be that the only interests of landlords requiring legal protection are those related to economic and investment factors, and that conflicts between the parties where the landlord’s economic position is unaffected should be resolved in favour of tenants. What then are the relevant economic and investment factors in respect of landlords that the residential tenancies legislation should respect? First and foremost, the landlord’s capital investment must be protected. In the landlord and tenant legal context this means that the rented premises (both the demised land and the attached buildings) are not damaged beyond that which is inevitable in any occupancy, and which falls under the principle of “fair wear and tear”. Thus, tenants should be responsible for repairing any damage caused by them during the course of the tenancy agreement. It does not follow, however, that landlords are entitled to have the capital investment improved by the tenant, and so any duty to put the premises into repair at the commencement of the tenancy should be the responsibility of the landlord.

The other major interest of landlords is that they have a secure return, in the form of rent, on their investment. It must be secure in that landlords are given a legal right to take action whenever the actions of tenants threaten the return. Thus, landlords should have the right to terminate a tenancy where the rent falls significantly into arrears and should be entitled to possession at short notice in these circumstances. The return must also be secure in that landlords should not be subject to artificial economic restraints in the form of rent control, whereby over time rents fall out of line with market values. Exceptions may be argued for in times of national emergency, such as war, where other forms of investment may similarly suffer. An exception may also apply where individual landlords can be shown to have unreasonably exploited their bargaining power and extracted an excessive rent. [34] A form of control of excessive rents already exists in many jurisdictions. [35] The hallmark of fair residential tenancies laws is that, except in national emergencies, landlords should not be obliged to provide a form of indirect social welfare to tenants, which could arise wherever the applicable legislation prevents or impedes a landlord from gaining possession of the rented premises where the tenant is not paying rent.

Subject to satisfying these valid concerns on the part of landlords, the focus of the residential tenancies law should be on the protection of the interests of tenants. The majority of these interests centre around the right of possession, both in terms of freedom from arbitrary termination of the tenancy, the desire for long-term stability and the freedom from interference by landlords during the course of the tenancy. This broad-based right of possession should encompass the following:

(i) A right to peaceful possession and freedom from harassment by landlords or by persons acting on behalf of or with the knowledge of landlords.

(ii) A right to be physically secure in the premises. Depending on the nature of the premises and the neighbourhood, this could range from a duty to provide adequate locks to a duty to provide an effective security system.

(iii) The introduction of just cause evictions, and the abolition of common law and statutory provisions giving landlords the right to terminate tenancies without reason. This principle would include the right of tenants to renew a fixed-term tenancy agreement in the absence of a valid objection from landlords.

(iv) Limitations on the landlord’s right of entry into the premises to inspect its condition, and an obligation on landlords to respect the privacy of tenants.

(v) A right by tenants to purchase the rented premises if they are offered for sale by landlords during the course of the tenancy. This right to purchase would amount to a right of first refusal.

(vi) As far as practicable, tenants should have the same right of control over their premises as homeowners. This entails the restriction on the addition into the lease of unnecessary covenants, such as a covenant preventing the tenant from forming or participating in tenants’ associations, covenants against keeping household pets and covenants purporting to restrict arbitrarily the number of occupants.

(vii) Treating tenants as having the same degree of control over the premises as householders also entails permitting tenants to dispose of their leasehold interest in the premises during the course of the tenancy without arbitrary restrictions and without financial penalties.

As well as protecting the right of possession, the law should reflect in its terms the right of the tenant, in return for the prompt payment of rent, to have the premises well-maintained and promptly repaired. The law should also recognise the inferior bargaining position of tenants by requiring all legally enforceable tenancy agreements to be in writing, and by ensuring that proceedings before Residential Tenancies Tribunals are conducted without lodging fees and without the presence of legal representatives.

B. The Interests of Society

It is frequently forgotten that society has vested interests to protect in respect of landlord and tenant laws. One of the more depressing aspects of the debates on landlord and tenant reform in Australia during the 1970s was the lack of recognition of this factor. This is perhaps surprising in that other aspects of real property law appear to be grounded on public policy factors: for example, rights acquired by prescription and extinguished by adverse possession are based on the consideration that landowners must be vigilant in protecting their rights and may lose such rights over time if they do not take action to protect their rights; the Torrens system of land title registration is based on the policy of simplifying land transactions and preventing land being artificially kept off the market by the doubtful state of the title; the law of restrictive covenants (and schemes of development) centres around the need for urban planning in modern society; the law of restraint against alienation of land assumes a public interest in keeping land freely on the market; and the law against perpetuities is based on the policy of preventing deceased persons from controlling property from the grave.

The provision of rental housing is clearly a central public policy concern and, it is submitted, outweighs in importance society’s concerns underpinning other aspects of real property law. What are society’s interests in this area of law?

(i) To promote a sense of community and participation in the community. A sense of community will not develop among people who do not feel secure in the possession of their homes and who for this reason lack a feeling of long-term involvement in community affairs. It is axiomatic that homeless people and those threatened with homelessness (or, at the least, deprivation of their home) will feel alienated from the community. To minimise this state of affairs, the law should severely limit the circumstances in which tenancies are terminated and should provide for just cause evictions. It should also promote home ownership, and thus provide the opportunity for tenants to purchase their rented premises.

(ii) To ensure good quality housing stock. Slum conditions are a blight on the community in many respects, from the fostering of crime to the alienation of people’s sense of community and to the discouragement of economic investment and tourism. The maintenance of good quality housing stock entails reliance on repair laws and excessive rent controls for substandard housing.

(iii) To ensure availability of rental housing. While private investment in the rental housing market should be encouraged as far as practicable, this alone is incapable of housing all categories of applicants. Lack of resources is likely to exclude from the sector many lower-income families and individuals. Thus there will always be a need for public rental housing if homelessness is not to be a largescale problem in society. In this regard society has an interest in ensuring that tenants of public housing are given equal treatment as tenants in the private sector under the prevailing landlord and tenant legislation, except regarding rules of financial eligibility to enter public housing. The notion that public housing tenants have no need of legislative safeguards in light of the fact that public housing authorities can be relied upon to act in their interests is, it is submitted, inappropriate and patronising.

(iv) To promote social and family stability. Social stability is fostered by ensuring that no form of discrimination is permitted. In addition to the application of generally-applicable anti-discrimination laws concerning race, sex and marital status, [36] we need additional anti-discrimination laws specifically applicable to residential landlord and tenant law concerning discrimination against families with children, pregnant women, aged persons and the unemployed. Family stability is also promoted by the introduction of just cause evictions and restrictions on termination of tenancies.

(v) To ensure access to rental housing. The law must ensure that potential tenants are not precluded from rented premises by having to pay too many up-front costs prior to being allowed into possession. In the past, tenants have been required to pay not only four weeks’ rent in advance, but also at least four weeks’ rent in the form of a security deposit, plus another lump sum variously called key money or premium.[37]

(vi) To improve educational standards. School education is advanced by home stability and by the maintenance of reasonable living conditions. It is retarded by the need to change schools as a result of a change of home and by inadequate and poorly-maintained premises.[38]

(vii) To foster human dignity. As referred to earlier,[39] article 11(1) of the International Covenant on Economic, Social and Cultural Rights declares the right to adequate hoursing to be a human right. Although Australia is a contracting party to this Covenant, no action has been taken by the Commonwealth Parliament to implement this provision in the housing and residential landlord and tenant laws. The lack of action in Australia contrasts unfavourably with equivalent laws in other countries. [40] Although the Commonwealth lacks a specific head of power in section 51 of the Constitution to legislate in this field, it would seem clear based on the reasoning of the majority of the High Court of Australia in the Tasmanian Dam case [41] that the Covenant would provide the Commonwealth with a sufficient pretext, if it wished, to legislate under the external affairs power, contained in section 51(xxix) of the Constitution.

(viii) To ensure that residential tenancies legislation is consistent with, rather than isolated from, other social goals. The goal of family preservation could be fostered by provisions giving the spouse of the tenant the right to remain in occupation and assume the tenancy on the tenant’s death and, under certain circumstances, the right to a compulsory transfer of tenancy on divorce or separation. Society’s goal of maximising energy conservation could be advanced by requiring or encouraging landlords under the terms of the residential tenancies legislation to install energy efficiency materials and devices and to recoup the costs by instalments by means of a small rent increase. [42]

(ix) To promote economic development. This goal suggests a rejection of forms of generally-applicable rent control, which act as an economic disincentive to further development. [43] It also suggests non-interference in the normal operation of market forces in the setting of the initial rent and any rent increase, provided that there is no evidence of exploitation of individual tenants.

(x) To establish a fair, harmonious and easily accessible system of dispute resolution. The operation of the existing Residential Tenancies Tribunals in several states is consistent with this goal. The granting of decision-making powers in this area to courts of general jurisdiction, as occurs in Queensland, is clearly inconsistent with the goal. Fairness in this context should encompass the use of specialist decision-makers, the exclusion of legal representation (on the basis that, if permitted, landlords would be far more likely than tenants to take advantage of the possibility of such representation), the abolition of lodging fees and the restriction of rights of appeal from the Tribunals to the courts. The need to promote harmony has perhaps been underrated in the past, and is important in light of the aggravated and personal nature of many landlord and tenant disputes. Consideration should be given to promoting dispute resolution in the first instance by mediation, as occurs under the terms of the New Zealand residential tenancies legislation. [44] If a system of mediation is established, determination by Residential Tenancies Tribunals should be limited to cases where mediation has failed.

(xi) To provide an effective system of enforcement for the terms of the residential tenancies legislation. Contempt for the law is fostered by weak and inadequate penalties and a failure to enforce obvious breaches of the law. The legislation should provide for adequate penalties and sufficient administrative and financial resources to enable breaches of the law to be detected and prosecuted.

(xii) To ensure that the Residential Tenancies Tribunals are given total and exclusive jurisdiction over all issues affecting residential leases. The possibility of overlapping jurisdiction with the courts or other Tribunals or housing authorities confuses the law and is likely to lead to ineffective or inefficient enforcement.

(xiii) To ensure that there are no artificial and legalistic exclusions to the scope of application of the residential tenancies legislation. While some lettings are appropriate for exclusion, such as short-term holiday lettings, leases granted by educational institutions, or lettings granted in association with the tenant’s employment. It is submitted that tenancies should not be excluded simply because they do not meet the common law test of exclusive possession for the creation of a lease. [45] In addition, the scope of the legislation should be expanded to include potential landlords and tenants.

C. The Relevant Considerations of Justice

Underlying these various considerations discussed above are a number of general considerations of justice and equity which must be recognised and respected in any reassessment of the terms of the residential tenancies legislation. Being general in nature, they are not frequently articulated in any legal context. Despite this, they are of fundamental importance for the future development of the law. None of the eventual changes to the law should conflict with these more general considerations. Consider the following:

(i) The law must reflect current social conditions. Failure to do so leads not only to inappropriate and outdated provisions, but also injustice. The current Anglo- Australian landlord and tenant law, which was originally developed to govern the relationship between moneylender and debtor, and was later redeveloped and expanded to govern tenancy relationships in pre-industrial, agrarian England, [46] cannot realistically be expected to apply justly in the modern residential context without massive changes. Many of these changes were introduced in the first stage of residential tenancies reforms in the 1970s and 1980s. Others are still awaiting introduction.

(ii) Analogous groups in society should be treated by the law in a comparable fashion. As explained earlier, [47] tenants may be regarded as consumers of space and services, and as such should be entitled to parity of statutory protection. As for common law, it seems axiomatic that a lease, being a contract, should be subject to normal contractual principles.

(iii) The payment of rent is the key to the rights of both parties. Full and timely payment should entitle the tenant to peaceful occupation of the premises in every sense, subject only to the right of the landlord to gain entrance occasionally to check the condition of the property. Any other interference should be considered a breach of the tenancy agreement entitling the tenant to compensation. Conversely, the failure of the tenant to make full and timely rent payments should entitle the landlord to take immediate steps to terminate the tenancy and gain possession of the premises. The law should reflect this fundamental division.

(iv) As it is unrealistic in light of expense to expect tenants of residential premises to seek professional legal advice as to their rights and duties under the tenancy, the law should strive for simplicity and the use of plain English in legislative drafting.

(v) Residential leases should be required to be in writing. It should be noted that under legislation based on the ancient English Statute of Frauds [48] writing is a general requirement for the transfer of interests in land and that short-term leases are an exception. The appropriateness of this exception can be called into question. While it can perhaps be justified in that short-term leases, being of relatively small value, offer little inducement for fraudulent conduct, the exception tends to militate against the interests of residential tenants. Such tenants frequently enter unwittingly into legally binding oral tenancy agreements by agreeing orally to the essential terms of a tenancy. In most instances such tenants believe that they are not legally bound if they have not signed a written form of agreement. In such situations, where the tenant never enters into possession of the rented premises, the tenant is considered to have breached the fixed-term agreement and will be liable for all rent falling due under the tenancy until such time as a replacement tenant can be located.

(vi) Both parties must be on equal terms in the matter of dispute resolution. The possibility of legal representation tends to favour landlords and should be prohibited. Except where possession is sought by the landlord on the ground of non-payment of rent, any delay in the dispute resolution process tends to disadvantage tenants as it is they who are living in the premises and enduring the problem underlying the application to the Tribunal.

3. The Second Stage of Reforms

Turning to the practical application of the law, what reforms are required in support of these theoretical considerations? The following are advanced for consideration, and can be conveniently grouped and discussed under a number of headings.

A. The Operation and Powers of the Residential Tenancies Tribunals49

Of all the reforms introduced by the existing residential tenancies legislation, the establishment of a new decision-making body with jurisdiction over all legal issues concerning landlords and tenants of residential premises and the removal of such issues from court jurisdiction was perhaps the most fundamental. Although no formal study of the effectiveness of such Tribunals has yet been conducted in any state, the lack of sustained criticism of the Tribunals and their acceptance by state governments of both major political persuasions suggests that the Tribunals have operated successfully. The case load of the Tribunals has certainly exceeded initial expectations. Even in South Australia, the least populated of the jurisdictions with a Residential Tenancies Tribunal, there are now well in excess of 5000 cases determined per year. There has been an increase in the order of 10 per cent each year since the legislation came into effect. [50] In a more populous state, such as New South Wales, applications are in the range of 20 000 per year. All such cases have been determined cheaply, in that legal representation is only allowed in exceptional circumstances and because filing fees are either extremely modest or are inapplicable. The system is without cost to consolidated revenue, as in most jurisdictions the costs of the tribunal are fully met out of the Residential Tenancies Fund, which receives its income from the interest earned on the investment of security deposits paid by tenants at the commencement of the tenancy agreement. [51] Justice before the Tribunals is also speedy, in that applications for compensation are usually determined within a month of lodgement, while applications for termination would normally be determined within two weeks (and in cases of alleged damage or vandalism to the rented premises, within a matter of hours).

These factors must be weighed against certain criticisms which have been levelled against the Tribunal. Perhaps the most extreme criticism is the likening of the Tribunal to a “kangaroo court”, in that decisions are made in a hasty manner by incompetent or semi-competent tribunal members. The allegation of incompetence is not borne out by the facts or the evidence. Tribunal members are selected from a wide range of applicants in all cases of appointment. They are appointed for at most a five-year term and are subject to removal by the Minister. [52] The likening of the Tribunals to “kangaroo courts” appears to stem from the fact that only an hour or less is allocated by the Registrar for the hearing of each case, and there is no right of appeal against an adverse decision of the Tribunal on the facts of the case. In this regard the Tribunal is in much the same position as the State Small Claims or Consumer Claims Tribunals. While it is true that there is a rapid turnover of cases in the course of a day’s hearings, this is also true in the case of Magistrates’ Courts and there is no evidence that justice has suffered as a consequence. Despite the allocation by the Registrar of only a short time to each hearing, tribunal members are instructed to devote as much additional time as appears to them necessary to resolve the matter properly. Any proven allegation that evidence has not been considered properly gives rise to administrative law remedies for breach of natural justice, to which all tribunals are subject. [53] It is accordingly submitted that this criticism is of no substance.

A second criticism of the Tribunals’ operation is that the vast majority of applications are lodged by landlords. There is statistical evidence to this effect, [54] which is used by tenants and tenants’ organisations as evidence of bias towards landlords in the Tribunals and of the fact that the legislation has not fulfilled the goals of reform outlined initially in the Poverty Inquiry reports. It is certainly prima facie disturbing to note that whereas the Poverty Inquiry found the existing law to be biased in favour of landlords and to need reform in the tenants’ favour, the main users of the Tribunals have been landlords. Further consideration shows, however, that this criticism is misplaced. Landlords’ applications are numerically superior because the primary problem in landlord and tenant relationships requiring formal resolution is that of non-payment or late payment of rent, which by their very nature places the landlord in the position of applicant. If this category of application is ignored, statistical evidence shows that the number of applications brought by tenants in areas of traditional concern to tenants (for example, the return of security deposits, repairs and rent increases) has increased over the years. The problem, if any, appears to be at the information level. Landlords and their agents are usually better informed than tenants as to the existence and role of the Residential Tenancies Tribunals and are therefore more likely to use their services. Ignorance of the Tribunals appears to be a major factor in restricting the number of tenant applications. The answer thus rests with the administration of the legislation rather than the terms of the legislation itself.

The Tribunals are further criticised in another matter which relates to administration. In all jurisdictions, the legislation is administered by the State Department of Consumer Affairs or the Department of Housing rather than by the Department of Justice. One consequence of this is that the Tribunals are usually accommodated in the same building or floor of the building as the Departmental officers who give advice to the public on the law and who are assigned to investigate initial complaints made by either party. In reality, such Departmental officers operate outside the control of the Tribunals, but this is not commonly realised by the public. The Tribunal is often wrongly criticised because of the allegedly wrong or misleading advice given, or for allegations of bias that arise from the conduct of the individual Departmental officer concerned. The allocation of the Tribunals to the Department of Consumer Affairs or the Department of Housing also causes problems for the Tribunals themselves in that the role of Tribunal and the need for the Tribunal to decide cases according to law, and independently of Departmental policies and desires can produce tension and conflict between the Tribunal and the senior Departmental officers. The answer to these problems would be to reallocate the Residential Tenancies Tribunals to the Department of Justice in each state. This requires no change to the residential tenancies legislation.

A final criticism of the Tribunals relates to the qualifications of the members appointed. Is it essential that all such members be legally qualified, or is it appropriate to appoint lay persons? While residential tenancies disputes in the majority of jurisdictions are determined by qualified lawyers, [55] there is no such restriction in South Australia and in that state lay members can and have been appointed. [56] Ultimately, it is a matter of opinion which approach is appropriate. It can be argued that the legislation presents many problems of interpretation, and that this is beyond the competence of non-lawyers. On the other hand, provided that the Presiding Member and some other members of the Tribunal are legally qualified, they can provide appropriate legal advice relevant to individual cases to the lay members. It is also undeniable that residential tenancies law raises important issues of social policy, and that non-lawyers with skills in other social issues have considerable expertise to offer the Tribunal. Perhaps the most telling argument in this regard is that the incidence of criticism of lay members of the South Australian Tribunal has been no greater than for the legally-trained members. [57] It is submitted on balance that non-lawyers should be declared eligible for appointment to Residential Tenancies Tribunals under all relevant state Acts.

As to the jurisdiction of the Tribunal, certain weaknesses are apparent. The Tribunal, as currently constituted, does not fulfil the recommendation of the Poverty Inquiry that it should have exclusive jurisdiction over residential landlord and tenant law. While there is no problem of forum shopping resulting from overlapping court jurisdiction, in some states, there is overlapping jurisdiction as to repairs with the local public housing authorities. A tenant who believes that the rented premises are substandard may apply either to the Tribunal or to the public housing authority for a repairs order. In South Australia the South Australian Housing Trust possesses the additional power of fixing the maximum rent until

such time as it is satisfied that the repair work specified has been satisfactorily undertaken. [58] In this respect there is overlapping jurisdiction with the Tribunal’s power to reduce excessive rent. [59] It is submitted that the residential tenancies legislation and the housing legislation should be revised so as to give the Tribunal exclusive jurisdiction over repairs orders in respect of residential leased premises. The powers of the public housing authorities in this regard should be limited to owner-occupied dwellings.

Another problem that has surfaced from time-to-time has been the question of whether the Residential Tenancies Acts constitute a codification of the law. If so, there should be no scope for further application of the common law of leases. The legislation itself does not address this issue. The practice of the Tribunals has been to incorporate principles of common law where they have perceived a lacuna in the terms of the legislation. An illustration of this is the adoption of the contractual principles of repudiation of contract in cases where the tenant abandons the rented premises prior to the effluxion of a fixed term tenancy agreement. [60] The matter of codification has not yet been judicially resolved. In the rare cases where decisions of the Tribunal have been reviewed by the district courts, it appears to have been assumed by the courts that it is appropriate for the Tribunals to apply the common law. To put the matter beyond doubt, it is recommended that the Acts should be amended by the addition of a provision expressly declaring that the Act is not a code.

The other outstanding issue is the absence in some jurisdictions of adequate contempt powers in the Tribunal. This matter was not addressed by the Poverty Inquiry reports. In New South Wales the issue of contempt cannot be dealt with by the tribunal members, but has to be referred to the court for action. [61] In other jurisdictions the legislation, which was originally drafted in similar terms to that in New South Wales, has been amended to grant contempt powers to the Tribunal. [62] The sanctions specified in the current legislation vary. [63] It is submitted that this issue should be reconsidered, and that the tribunal members be empowered to punish contempt by a substantial monetary penalty, although not by imprisonment.

B. Dispute Resolution Issues

Two issues are worthy of consideration here: the role of magistrates as decisionmakers in landlord-tenant disputes; and the role of alternative dispute resolution processes.

In some jurisdictions the government has questioned the appropriateness of 418 SYDNEY LAW REVIEW [VOL 20: 402 determination by tribunals and has considered abolishing them and investing their jurisdiction in the Magistrates’ Courts. This has actually occurred in Western Australia. [64] This is considered to be an unfortunate development and to fly in the face of the Poverty Inquiry recommendations. [65] There is no obvious advantage in granting jurisdiction over tenancy matters to Magistrates’ Courts, and in fact there are several disadvantages: magistrates have no special knowledge of tenancy issues, their courts detract from the goal of informality of proceedings, and they already have a heavy workload and a rapid turnover of cases. There is no cost saving associated with investing Magistrates’ Courts with this field of jurisdiction as the Tribunals are fully funded by income generated from the investment of security deposits provided by tenants in the private sector.

The primary issue associated with alternative dispute resolution processes is whether greater use should be made of mediation in the tenancy context. This occurs on an informal basis in some jurisdictions as tribunal members are encouraged to try to settle cases, if possible. However, the practice varies greatly between jurisdictions and even between tribunal members, and few resources are specifically allocated to the mediation processes. In addition, the rapid turnover of cases militates against the proper use of mediation techniques. This can be contrasted with the position in New Zealand, where the legislation establishes mediation officers and specifies that all applications must be referred in the first instance to mediation before being determined by the Tribunal. [66] It is also worthy of note that the retail tenancies legislation in force in some jurisdictions mandates an attempt at mediation prior to final determination. [67] The issue ultimately comes down to one of resources. If the New Zealand position is to be replicated in the Australian states, funding for the appointment of mediators, together with appropriate administrative support and office facilities, will be necessary. A properly functioning system of mediation would, however, represent a significant improvement in the current situation in that it would reduce the current workload of the Tribunals, and would reduce the incidence of “kangaroo court” allegations. Consistent with normal findings in respect of mediated settlements, it would be likely to lead to an increased level of satisfaction amongst disputing parties and greater respect of the Tribunal itself. On balance, it is submitted that the New Zealand provisions should be introduced into the various Australian Residential Tenancies Acts.

C. Public Housing Tenancies

In most current Residential Tenancies Acts public housing tenancies are included within the scope of the legislation and are treated similarly to tenancies in the private sector. This is achieved by a provision stating that the Act shall apply to the Crown. [68] An exception is South Australia, where the Housing Trust waged an ultimately successful campaign to be exempted from the operation of the Residential Tenancies Act 1978 (SA). [69] This situation has been partially redressed in the new Residential Tenancies Act 1995 (SA), but the Housing Trust is still only subject to certain specified provisions, largely related to termination of tenancies, and is by no means on an equal footing with other landlords. [70] It is submitted that in principle the legislation should apply equal treatment to all categories of tenant. Thus, the Acts should clarify the fact that the legislation applies to public housing tenancies, subject to specific exceptions which in each case should be justified by reference to the special nature of the relationship between the public housing authority and its tenants.

In no state does the current legislation extend the jurisdiction of the Residential Tenancies Tribunals to disputes involving the relationship between public housing authorities and applicants for tenancies (prospective tenants). [71] In this sense, the legislation runs counter to the recommendations of the Poverty Inquiry, which observed that there is no adequate form of legal redress available to prospective tenants who are denied public housing authority leases. [72] It also appears to run counter to the right to adequate housing established under article 11(1) of the International Covenant on Economic, Social and Cultural Rights. [73] There is no specific legislative control over the grounds on which an applicant can be excluded and no system of redress to challenge the adverse exercise of administrative discretions by officers of the public housing authorities. The only recourse available to applicants for public housing tenancies in these circumstances is administrative law remedies, access to which is far beyond the financial means of low-income persons. [74] It is submitted that the legislation should specifically grant jurisdiction to the Residential Tenancies Tribunals in this matter. The legislation should also provide a list of acceptable reasons for the public housing authority to refuse a tenancy to applicants. Additionally, the authority should be required, on application brought before the Tribunal by a rejected applicant, to justify its decision on the facts of the case by reference to the list.

D. Scope of Residential Tenancies Legislation

In addition to the matters referred to in the preceding paragraphs, there are two further issues relating to the scope of the residential tenancies legislation which a future reform of the legislation should actively consider. One issue relates to the limited nature of premises subject to the Acts. The legislation should aim to be as comprehensive as possible in its application to residential premises. There are undoubtedly some situations, such as premises leased to employees by employers and premises forming part of educational institutions, where exceptions can be justified on policy grounds. However, each omission from the application of the legislation should be justifiable. In this regard it is submitted that the residential tenancies legislation in all jurisdictions should extend to caravans and mobile homes, other than those occupied temporarily for holiday purposes. Such premises are usually occupied by those who are unable to afford normal residential premises, yet who are in equal need as tenants of normal accommodation for the types of safeguards contained in the residential tenancies legislation. In some jurisdictions, the residential tenancies legislation has been amended to include caravan and mobile home dwellers, but with several exceptions. [75] We need similar legislation on this matter in all jurisdictions, and a limitation on exceptions to those which can be justified by the differing nature of the premises.

The other issue relates to mixed commercial and residential premises. Such premises are numerous throughout Australia, particularly in respect of small retail premises. While the relevant terms of the current residential tenancies legislation differ between the jurisdictions, such premises are outside the scope of the legislation in the majority of cases. [76] It is submitted that the residential tenancies legislation should be amended so as to include mixed commercial and residential premises where the principal purpose of the lease is a residence. [77] In order to avoid overlapping jurisdiction, it will also be necessary to amend the state retail tenancies legislation to reflect this change. [78]

E. The Creation of Additional Rights and Duties of the Parties

The creation of additional rights and duties between landlords and tenants is perhaps the most important role of the proposed second stage of residential tenancies reforms.

It is submitted that the most important additional right that should be provided is the right of the tenant in certain circumstances to purchase the freehold title of the rented premises. This right should be allowed in all cases in respect of public housing authority tenants. In the private sector, the right should extend to the right of first refusal wherever the landlord decides to sell the premises during the course, of or at the termination of, a residential tenancy agreement. Where the landlord sells the premises to a third party in contravention of this provision, the tenant should be allowed to bring action to rescind the sale within a specified period (say three months). A sale in contravention of the tenant’s right of first refusal would also constitute an offence by the landlord, subject to a monetary penalty. Similar laws exist in the United Kingdom and France. [79] Such a reform can be justified by reference to the theoretical discussion above on the interests of society in the formulation of tenancy laws, [80] in particular the desirability of promoting amongst tenants a sense of community and community participation, and of promoting social and family stability.

A matter of increasing concern to tenants is that of security. In this respect, the simple provision found in current residential tenancies legislation, that the landlord provide the premises with adequate locks, is considered to be insufficient, and should be replaced with an obligation to take all necessary measures under the circumstances, and at the least to provide security locks on all external doors and windows. There should also be an obligation that the landlord replace all external door locks on a change of tenants. Failure to do so should render the landlord liable to compensate the tenant for any losses suffered in a housebreaking or burglary where the illegal entry results from a security breach. [81]

An issue of social concern in recent years is that of energy conservation. Various studies have pointed to the environmental and fiscal advantages that a serious campaign in favour of energy conservation can produce. [82] Energy conservation issues affect many different sectors of the economy, of which buildings are one of the most important. While various forms of economic incentives in the building sector have been proposed and enacted in various jurisdictions, [83] these have had little impact in the case of leased residential property, in respect of which few improvements have been realised. The reason for inaction in this area is that neither the landlord nor the tenant has any incentive to invest in energy conservation materials or devices. The landlord lacks incentive in that any savings from reduced energy consumption will flow to the tenant, while the tenant will not wish to invest in capital improvements for the benefit of the landlord. [84] In these circumstances legislation would appear to be necessary to promote the public interest. While various different forms of legislation would be possible, the effective choice would appear to be between a system dividing the capital costs of installing specified energy conservation measures between the parties according to a formula which would vary according to the length of the lease, and a system which would permit the landlord to receive a rent increase proportionate to the amount of energy savings after having installed energy conservation measures in the rented premises. Under the former system, the longer the term of the lease the greater would be the tenant’s contribution. [85] The latter system has been introduced in France, where legislation enacted in 1982 states that the amount of rent increase in these circumstances must in no case exceed the value of the guaranteed amount of energy saved. [86] On balance, the latter system is considered by the writer to be preferable, subject to the qualification that without the tenant’s consent the landlord should be prohibited from installing the energy conservation measures until the end of the fixed-term tenancy or, in the case of a periodic tenancy, after giving one period’s notice to the tenant. Subject to this qualification, the landlord should be given an express right of entry into the premises at all reasonable hours to install energy conservation measures and should be entitled to apply to the Residential Tenancies Tribunal for a rent increase at any time after the installation.

Misunderstandings between the parties at the time of the initial negotiations prior to signing a tenancy agreement are a common source of disputes before the Residential Tenancies Tribunals. These misunderstandings are more likely to arise in the context of residential rather than commercial leases as it is uncommon for residential tenants to seek professional advice as to the terms of the tenancy. Such misunderstandings range over a wide range of matters, including the keeping of pets, the number of occupants permitted on the premises, and the use to which the premises can be put. It is common for tenants to argue that certain specified arrangements were intended by the parties even if not reduced to writing and that the tenant entered into occupation on that oral understanding. The current residential tenancies legislation contains no provision on this point. In the absence of legislation, the common law rule in Liverpool City Council v Irwin [87] applies, pursuant to which such oral understandings will only be applied by the courts where it is necessary to give business efficacy to the contract. The judgments of the House of Lords in this case make it clear that this is a strict test to meet and that the courts will not lightly enforce any understanding which is not reduced to writing and forms part of the tenancy agreement. It is submitted that this test is too severe to be fair in the residential tenancies context. It is suggested that a new provision is required in the legislation is required. This would apply to all covenants which were intended by the parties to form part of the tenancy agreement, at the time of the signing of the lease, even if such covenants were not expressed.

Three further minor, yet important additional rights and duties are suggested:

(i) There should be some limitation placed on the clauses which can legally be added to the standard form of tenancy agreement. Without such limitation, the standard form, which has the purpose of ensuring that the tenancy agreement is a balanced document and is not biased in favour of either party, may be used by landlords to create a one-sided and oppressive document. As it would be impossible to draft an exhaustive list of additional clauses which should be excluded, it is recommended that the Residential Tenancies Tribunal should be given the express power to declare invalid any additional clauses which it finds, in its discretion, to be unfair or oppressive under the circumstances. Currently the Tribunal considers itself bound by the law of contract to enforce any additional clause provided that it is not inconsistent with the terms of the Residential Tenancies Act. [88]

(ii) The obligation of tenants not to cause a nuisance, which is already contained in the existing residential tenancies legislation, [89] should be extended so as to apply to neighbouring residents generally rather than simply to the landlord and other tenants of the same landlord, as at present. [90] This is currently perceived in many quarters as an unnecessary limitation. Such a provision would not give neighbouring residents the right to bring action in the Residential Tenancies Tribunal, whose jurisdiction is rightly limited to disputes between landlords and tenants, [91] but would allow the landlord or other tenants of the landlord to take appropriate action.

(iii) The respective rights of the landlord and tenant as to the ownership of any valuable property up to a specified monetary limit (say $10,000) found on the rented premises by the tenant, in the absence of a claim by the true owner, should be specified and should be within the jurisdiction of the Residential Tenancies Tribunal. At present, such disputes would be resolved at common law, and the current state of the law is far from clear. [92] It is submitted that such disputes should normally be resolved in favour of tenants, except where the landlord can show that 424 SYDNEY LAW REVIEW [VOL 20: 402 he or she personally or through any members of his or her immediate family occupied the premises immediately prior to the present tenant.

F. Anti-Discrimination Provisions

The current state residential tenancies legislation contains only one antidiscrimination provision, that of discrimination by landlords against applicants for tenancy agreements on the ground that it is intended that children shall live in the rented premises. [93] Anti-discrimination provisions in the residential tenancies legislation on other grounds, such as race, sex or marital status, are unnecessary as these forms of discrimination are prohibited under Commonwealth and State legislation. [94]

It is submitted that the current anti-discrimination provisions are inadequate in that they do not include all the various discriminatory practices that commonly arise in the context of residential tenancies. Other jurisdictions frame their laws much more broadly. Article 1899 of the Civil Code of Quebec, for example, extends the legislative anti-discriminatory measures to protect applicants for tenancy agreements who are pregnant women or who are discriminated against on the sole ground that they have exercised their rights under the Code. [95] In New Zealand, section 6 of the Residential Tenancies Act 1986 extends the protection to the unemployed. It is submitted that the Australian state residential legislation should similarly be extended to protect these groups of potential tenants. Similar protection would also seem appropriate in the case of handicapped persons.

G. Rent and Other Charges

From the standpoint of tenant protection, two of the most important provisions enacted in the present residential tenancies legislation are those controlling excessive rent and rent increases. [96] Unfortunately, both provisions contain significant weaknesses which have rendered them less effective than was originally anticipated.

The rent increase provision is limited to a requirement that the landlord give the tenant a minimum period of notice of any proposed increase. It does not contain any restrictions on the amount of any increase. This is applied indirectly in that in most jurisdictions the legislation gives the tenant the right to apply for a rent reduction on the ground that the proposed increase is excessive. The excessive rent and rent increase provisions are thus interrelated. Unfortunately, the excessive rent provision has proved in practice to be ineffective as the legislation requires the tenant to prove the excessive nature of the increase by reference to a list of economic factors which would normally be beyond the tenant’s competence. [97]

It is submitted that the legislation should seek to limit the maximum amount of any rent increases, rather that leave the issue to the landlord subject to legal challenge by the tenant. The Canadian Province of Prince Edward Island has recently legislated to limit the amount of rent increases for residential premises to the percentage amount prescribed by the Lieutenant Governor in Council. [98] Rent increases beyond the specified amount is only permitted on application by the landlord to the Director of Consumer Affairs and after a hearing of the matter before the Director at which the landlord is able to convince the Director that the increase proposed should be approved on the facts of the case. It is submitted that a similar provision should be adopted in the Australian residential tenancies enactments, with the Residential Tenancies Tribunals determining any applications brought by landlords.

It is further submitted that the current excessive rent provisions should be modified so as to place the onus of proof on landlords to prove, by reference to the specified criteria, that the rent is not excessive, rather than to continue with the present system whereby tenants have to prove that the rent is excessive. The reversal of the normal onus of proof has already been adopted in other tenancy contexts, notably that of the anti-discrimination provisions, [99] and appears to have been accepted as reasonable.

The current provisions relating to security deposits should also be reformed in one major respect. Many tenants are unable to afford to pay the four weeks’ security deposit authorised by the residential tenancies legislation and so are effectively excluded from tenancies in the private sector. This situation leads to undesirable social consequences, with such persons either becoming homeless or placing further pressure on the availability of public housing. In South Australia lower-income applicants for tenancies have the right to apply to the Housing Trust for a guarantee to the value of four weeks’ rent to be given on their behalf by the Trust to their prospective landlords. Such a system appears to operate effectively, but is precarious in the sense that it is not enshrined in legislation and could be withdrawn at any time at the discretion of the Housing Trust or the state government. It is submitted that the residential tenancies legislation in each state should be modified so as to incorporate fully the current system of housing authority security bond guarantees, as currently operating in South Australia. Any dispute between the prospective tenant and the public housing authority over the provision of the guarantee should be within the jurisdiction of the Residential Tenancies Tribunal. The Tribunal should also be given jurisdiction, on application by the public housing authority, to order tenants to reimburse the authority in situations where landlords have proved before the Tribunal their entitlement to all or part of the sum guaranteed.

The existing legislation in many jurisdictions is silent on the question of the payment of water charges. In these circumstances landlords frequently insist on the inclusion of a clause in the tenancy agreement placing the obligation on tenants to pay any additional water charges beyond that included in the basic water allowance. Historically, this has worked fairly in that the basic water charge was generous. This situation has now changed and in most jurisdictions the basic water charge has either been abolished or has been severely limited. The overall effect is that additional water charges have become the norm, rather than the exception, for residential premises. In some jurisdictions, the legislation has been amended recently so as to prevent the landlord recouping from the tenant the cost of the first tranche of water charges under the graduated list of charges prescribed almost universally by water legislation. [100] It seems unfair that water charges should be imposed upon tenants of residential premises as a result of the application of changes to the water legislation which were introduced without a consideration of their position. It is submitted that the residential tenancies legislation should be amended so as to require the landlord to pay the water charges levied in respect of a designated amount of water consumed on the premises. Clauses in tenancy agreements in breach of this proposed statutory provision requiring the payment by tenants of water charges should be invalid to the extent that they are not consistent with the terms of the legislation.

H. Repairs

In conformity with the recommendations of the Poverty Inquiry, [101] the current legislation uniformly places the duty of putting and keeping the rented premises in repair on the landlord. The tenant’s obligation is not to damage the premises during the course of the tenancy and to notify the landlord in the event of causing or discovering any damage or lack of repair. [102] In general, these provisions appear to have worked fairly and effectively.

One major and one minor reform can nevertheless be recommended. The major recommended change is the provision of a statutory covenant of fitness for the purpose intended by the parties in respect of all parts of the rented premises. At first glance this might be considered unnecessary in light of the comprehensive nature of the current law on repairs. However, problems as to the exact nature of the landlord’s repair obligations have arisen in tribunal hearings in respect of outlying parts of the premises that are not designed for human habitation. To what extent must these premises be maintained? Must they be maintained at such a level that they be useable as accommodation, even though they were not constructed for this purpose? If they were not designed for occupation by the tenant, must they be repaired at all by the landlord? Such issues have arisen most commonly in the context of garden sheds and garages, where landlords have argued that their duty of maintenance is inapplicable. Justice would seem to demand that unless such buildings are excluded by the terms of the tenancy agreement from the scope of the lease, they should be subject to the normal repair obligations. However, because of the wide variety of possible buildings and circumstances in each case, it is impossible to draft specific legislation that would apply in each case. The answer, it is submitted, is a statutory covenant of fitness for the purpose intended. This covenant, which is commonly found in legislation outside the lease context, [103] is sufficiently flexible to provide an appropriate solution in each case. Thus, a garden shed will be required to be maintained in a condition normally considered to be acceptable for garden sheds, while garages and other out-buildings will be treated in a similar manner.

The minor recommended reform is in respect of the landlord’s right of entry into the rented premises in order to carry out the required repairs. This is a surprisingly common source of dispute. The current legislation differs from jurisdiction to jurisdiction, but commonly refers vaguely to “all reasonable hours”. It is submitted that the legislation should incorporate a new, more specific provision in the following form:


The tenant may not refuse to allow the landlord to have access to the rented premises to carry out repair work. The tenant may deny the landlord access before 8 a.m. and after 6 p.m., however, unless the work is urgent. 104

I. Assignments and Subleases

The major weakness in the existing residential tenancies legislation relating to assignments and subleases is that the common law rule that the original tenant remains liable for the satisfactory performance of all the covenants in the tenancy agreement until the end of the term of the agreement, regardless of any later assignment or subletting, continues to apply. 105 This rule is based on the principle of privity of contract between the landlord and the original tenant. It is recommended that the legislation be amended to exempt the original tenant from liability for any breaches of the tenancy agreement or the Residential Tenancies Act by the new tenant. The only exception to this exemption of the original tenant from liability would be assignments and subleases made in bad faith in order to escape legal liability. A reform of this nature has recently been enacted in the United Kingdom under the Landlord and Tenant (Covenants) Act 1995. [106]

The other, more minor proposed reform is the rectification of an anomaly that appears to have crept into the existing legislation unnoticed. At common law an assignment or sublease made without the required consent of the landlord renders the assignment or sublease voidable, [107] whereas under the terms of the legislation such a transaction is declared to be void. [108] The common law is thus more generous to tenants in that it takes positive action on the part of the landlord to set aside the transaction. This change was unexpected and probably unintentional as it was not recommended by the Poverty Inquiry and was not even pressed for by landlords’ lobby groups at the time of the enactment of the legislation. It is recommended that the common law position be restored by the addition of a provision declaring all assignments and subleases made without the landlord’s consent to be voidable.

J. Termination of Tenancies

It is in the area of termination of tenancies that the greatest need for reform arises. While the changes introduced by the existing legislation removed some of the worst common law anachronisms and injustices and streamlined the process of gaining possession where the tenant breaches one or more of the terms of the tenancy agreement, there are still a number of anomalies and deficiencies in the law which require attention.

The major area of concern in relation to termination of tenancies is the grounds upon which this remedy is available. The principle of “just cause evictions” has always been proclaimed as fair by tenants’ representatives and interest groups. [109] Under this principle the legislation would codify the grounds on which termination of leases is possible, and it would be impossible for landlords to terminate any type of tenancy agreement without specifying and proving one or more of the grounds. This principle is fundamentally different from the common law position, whereby fixed-term leases expire automatically by the effluxion of time [110] and no reason need be given for the termination of a periodic lease. Under the current residential tenancies legislation, periodic tenancy agreements can still terminate without reason, although in many cases the amount of notice required of landlords has been increased beyond the common law requirements. [111] As for fixed-term tenancy agreements, each state has prescribed a list of acceptable grounds for termination, but these do not prevent a lease from expiring by the effluxion of time.[112]

It is submitted that the position of landlords will not be prejudiced by the introduction of the principle of just cause evictions, provided that the list of acceptable grounds for termination specified in the legislation is sufficiently broad, as appears to be the case at present. Accordingly, it would seem appropriate to adopt by amendment this principle.

The other major consideration is whether new grounds for termination should be added to the existing approved statutory list. The operation over several years of the Residential Tenancies Tribunals in most jurisdictions has brought to light a number of situations where justice would be improved by the addition of further grounds. Perhaps the greatest deficiency in the present regime is the failure to consider the case where the tenant’s situation changes dramatically during the course of a fixed-term tenancy agreement through no fault of the tenant. In these circumstances, under existing law the tenant is unable to terminate the tenancy agreement without being liable for losses for wrongful repudiation. [113] This situation is covered by the equivalent legislation in a number of overseas jurisdictions: for example, article 1974 of the Civil Code of Quebec permits a tenant to terminate a tenancy agreement where he or she suffers a physical handicap, or is allocated public housing, or (in the case of an elderly person) is admitted to permanent care. [114] It is submitted that similar legislation should be adopted throughout Australia, provided that it is accompanied by another provision requiring the Residential Tenancies Tribunal to have regard to any hardship caused to the landlord by the early termination of the tenancy agreement and requiring the Tribunal to refuse the tenant’s application if the hardship caused to the landlord by terminating the lease is found by the Tribunal to be greater than the hardship that would be caused to the tenant by not terminating the tenancy agreement under these specified circumstances. [115] The Tribunal should also be empowered to award the landlord reasonable compensation where it terminates the tenancy agreement under these circumstances, although the quantum would not be measured by reference to damages for prospective loss following repudiation of the lease.

Another deficiency in the present legal regime is that landlords are insufficiently protected against tenants who are consistently late in paying their rent. Under the majority of the existing statutes, a landlord has to wait until the rent is at least two weeks in arrears before being entitled to lodge an application to the Tribunal for termination of the tenancy agreement. [116] The matter may take up to two further weeks before the date of the hearing. If, prior to the hearing, all arrears of rent are paid the Tribunal never in practice grants termination. Even if all arrears are not paid off by the hearing, in many cases the Tribunal has a discretion, which it frequently exercises, to refuse the application for termination where it believes that the tenant will pay off the arrears by instalment payments. This appears to be well known to many tenants who are consistently chronically late in paying rent. Repeated incidents of this nature can cause considerable financial hardship to landlords. It is accordingly submitted that the Australian jurisdictions should adopt the reform introduced in article 1971 of the Civil Code of Quebec, pursuant to which the Tribunal may order termination of a tenancy agreement where the tenant is frequently late in paying rent, as a result of which the landlord suffers serious prejudice. [117]

It is further submitted that termination should also be allowed in limited circumstances where personal differences have arisen between the parties, and where the tenant or any of his or her invitees engages in anti-social behaviour. In some jurisdictions the latter ground is encompassed by the ground of termination entitling the landlord to terminate a tenancy agreement where the tenant has committed a nuisance. [118] In practice, however, this provision has seldom been used by the Tribunals to evict tenants because of the inherent vagueness of the word “nuisance” and the inability of any person other than the landlord to bring proceedings before the Residential Tenancies Tribunal. [119] A ground of this nature already exists in Ontario, where the relevant provision states:

Where, on the application of a landlord or a tenant, the Commission determines that, (a) the landlord and the tenant share a bathroom or kitchen facility; and (b) personal differences that have arisen between the landlord and the tenant make the continuation of the tenancy unfair to either of them, the Commission may make an order terminating the tenancy, and where the landlord is applicant, evicting the tenant, on a date specified by the Commission. [120]

The rationale is that where the parties share common essential facilities a breakdown in relations may render the living conditions untenable for either or both parties. Although such a provision might be considered to be open to abuse in the sense that an allegation of personal differences would be easy to make, the party making the allegation would have the onus of satisfying the Tribunal on the balance of probabilities of the facts, and of the unfairness of allowing the tenancy agreement to continue. With these safeguards in place, the provision would seem appropriate. In addition to modifying the grounds for termination, it is submitted that further legislative changes should be made in relation to the following matters:

(i) The common law rule that a fixed-term tenancy agreement terminate by the effluxion of time should be repealed by a provision requiring the parties to give a minimum specified period of notice, say one month, prior to the date of termination if he or she wishes the tenancy to come to an end on that date. This change is considered appropriate in light of the fact that it is common for either or both parties to forget the date of expiry of the agreement. In these circumstances it is arguably unfair if the tenant is suddenly required by the landlord without warning to vacate the premises on the ground that the tenancy agreement has expired.

(ii) Termination by landlords in retaliation for the exercise by tenants of any rights that they may possess under the Residential Tenancies Act or any other law, should be prohibited. Any notices to vacate given by landlords in such circumstances should be declared to be void. Most of the jurisdictions have some provision dealing with this situation. Unfortunately, however, the legislation is deficient in that it is far from comprehensive in its scope. [121]

(iii) Where the tenant breaches the term of a fixed-term tenancy agreement, it is common for a landlord to demand compensation in respect of all advertising expenses incurred in procuring a replacement tenant and for the payment of the estate agent’s reletting fee (normally two weeks’ rent). It is submitted that these expenses should be shared between the parties rather than borne exclusively by the tenant. The landlord would have incurred these expenses eventually in any event if the lease expired or was terminated normally, and the effect of the tenant’s breach is to advance the occurrence of these expenses rather than to cause additional expenses. In South Australia, the Tribunal has adopted by a rule of procedure a formula to allocate these expenses between the parties. The formula is based on a sliding scale whereby the longer the tenant remains in possession, the greater is the landlord’s contribution to the expenses. Conversely, where the tenant abandons the rented premises shortly after the commencement of the tenancy agreement, he or she will be liable for most, if not all, of the expenses. [122]

(iv) The Residential Tenancies Tribunal should be empowered to hear applications brought by landlords in respect of squatters. The current legislation in Australia on this subject varies, 123 but in many states such applications are precluded because of the legislative requirement that only applications between a landlord and a tenant are within the Tribunal’s jurisdiction. It seems unfair if the landlord has to initiate time-consuming and expensive court action to evict squatters, especially in light of the fact that in some instances the Tribunals now have jurisdiction over matters other than traditional landlord and tenant law. [124]

(v) The legislative requirement in the residential tenancies context in some jurisdictions that the party in breach of the agreement should be served a notice requiring him or her to remedy the breach within a specified period, where the breach is capable of remedy, should be abandoned. [125] The relevant legislation in the Residential Tenancies Acts has been copied from long-standing statutory provisions in state property legislation, applicable to all leases, which has been inherited from the United Kingdom. [126] The meaning of this legislation is confusing and has spawned a significant body of case law on the issue of what breaches are capable of remedy. [127] Even today the issue is far from resolved. In the residential tenancies context the requirement has led to applications being dismissed on procedural grounds in circumstances where the substance of the application suggests that an immediate remedy should have been ordered by the Tribunal. The original purpose of the provision appears to have been to give the tenant a final opportunity to comply with the terms of the tenancy agreement and so to avoid eviction. As such it appears to form part of the notion of equitable relief against forfeiture, which has historically always been exercised by the courts favourably towards the tenant. [128] It would seem that this purpose can be met by simpler means. Under the residential tenancies legislation the Tribunal in all cases has the discretionary power to refuse to grant possession of the premises even if the landlord is able to prove a breach of the tenancy agreement normally entitling him or her to terminate the tenancy. It is submitted that provided that this discretion is left substantially unfettered by the wording of the relevant provision, there is no need for the notice to remedy the breach as the tenant will be sufficiently protected against unfair eviction. The notice is thus superfluous and can be dispensed with by legislative amendment.

K. Enforcement

Enforcement represents an area of law where the residential tenancies legislation has been a conspicuous failure. This is due both to the inadequacy of the provisions in the legislation and to the lack of administrative support provided by the state governments in support of the legislation. The legislation is inadequate in that the monetary penalties prescribed for breaches are in most cases unrealistically low. Maximum penalties vary, but seldom exceed $1000, which for many landlords would simply represent the cost of doing business and would not act as an effective deterrent. In some cases duties are prescribed by the legislation without any penalty at all being prescribed. [129] It seems axiomatic that penalties should be prescribed for all breaches of the legislation and that the maximum amount of the penalty should be substantially increased. Breaches of the legislation which are detected in residential tenancies hearings are normally reported by the tribunal member concerned to the Registrar, who forwards the file to the Attorney-General’s Department for possible prosecution. The practical difficulty encountered at this point is that the Department lacks sufficient staff to conduct systematic prosecutions, and the available staff are usually assigned to tasks deemed more important. The remedy would appear to be primarily administrative rather than legal. While the penalties specified for breach of the terms of the legislation should be significantly increased, it is effective administrative action in pursuance of breaches that is likely to secure a greater level of compliance by the parties concerned. Such change would probably require the hiring of additional staff, but this should not be an insuperable barrier as the necessary funding could come from the existing Residential Tenancies Funds, which are not at present fully committed.

4. Conclusion

Although these recommendations for reform would, if adopted, constitute a substantial change in the law of residential tenancies, they do not mark a change in direction, but are rather part of the continuous process of statutory evolution. The fact that such reforms may be judged necessary does not imply that the existing legislation has been a failure. It would indeed be surprising if fundamental and comprehensive legislation introduced into an area previously governed exclusively by common law principles did not require significant adjustment after nearly 20 years of practice. The fact that landlords’ associations, which vigorously opposed the initial introduction of residential tenancies legislation in the 1970s, have ceased their total opposition is witness to the fact that the existing law has been successful.

As for the process of reform, an initial question is whether the proposed reforms will require the repeal and replacement of the existing residential tenancies legislation or an amendment to the existing laws. From a technical standpoint, either would suffice, although the repeal and replacement option would appear to be preferable as it would give the legislature the opportunity to draft the legislation in plain English. The process of reform also raises the issue whether uniform state and territory legislation on this subject is desirable and feasible. As discussed earlier, [130] no attempt was made to ensure that the existing residential tenancies legislation is uniform. In fact, there are several fundamental differences between the terms of the various enactments, and states which enacted legislation in the second wave of legislation in the 1980s appear to have paid only scant attention to the terms of the legislation enacted in South Australia and Victoria in 1978 and 1980, respectively. The terms of the legislation appear to have been dictated by the nature of the prevailing political situation at the relevant time in each jurisdiction. The attempt made in this article to base the terms of any new legislation on theory, rather than politics, will hopefully make the task of achieving consensus across the country on the terms of the appropriate reforms much easier. Even without a consideration of the theoretical underpinnings of the legislation, it is submitted that uniform legislation is desirable. This appears to be an area where there are no vested interests that the states and territories have to protect. In addition, the Australian economy effectively operates as a single entity, and it appears illogical and fanciful to try to justify the existence of variations in the terms of the legislation on the basis of the nature of the local economy or rental housing market. For this reason it is suggested that the issue of uniform residential tenancies legislation should be referred to the Council of Australian Governments (COAG) for consideration and report. The possibility of the introduction of Commonwealth legislation in this area under s51(xxix) of the Constitution, the external affairs power, in order to achieve uniformity will perhaps act as an incentive for certain more reluctant legislatures to fall into line with the majority of the states and territories. [131] The second stage of reforms proposed in this article will, if enacted into law, not only mark the conclusion of the process of providing residential landlord and tenant law with modern and socially relevant theoretical underpinnings, but will also give Australia the opportunity to lead the English-speaking world in this area. This is an exciting prospect in that historically in the field of real property law Australia tends to follow other countries. Thus, for example, in respect of easements, restrictive covenants, adverse possession, mortgages and the general law of leases, Australian common law and statutes have largely copied developments in the United Kingdom. In the area of native title, despite the landmark High Court decisions in Mabo v Queensland (No 2) [132] and Wik Peoples v Queensland, [133] Australian law has lagged behind that of the United States, Canada and New Zealand. [134] The lack of innovation in this area is in marked contrast with other areas of law affecting issues of social policy, such as the law of divorce, [135] property division on family dissolution [136] where Australia has been in the vanguard of reform in recent years. Reform in the residential tenancies context is thus consistent with the general development of Australian law and will enhance and expand Australia’s reputation for legal innovation in issues of social concern.



[*] Bonython Professor of Law, Faculty of Law, University of Adelaide and part-time Member of the South Australian Residential Tenancies Tribunal.
[1] This can be compared with the United States, where the courts created new concepts regarding constructive eviction, partial constructive eviction and retaliatory eviction in favour of residential tenants. See eg, Reste Realty Corporation v Cooper (1969) 53 NJ 444; 251 A 2d 268; Dickhut v Norton (1970) 45 Wis 2d 389; 173 NW 2d 297; Edwards v Habib [1968] USCADC 312; (1968) 397 F 2d 687; Robinson v Diamond Housing Corporation (1972) 463 F 2d 853; Schweiger v Superior Court of Alameda County (1970) 3 Cal 3d 507; 476 P 2d 97; Windward Partners v Delos Santos (1978) 59 Haw 104; 577 P 2d 326. See also Bradbrook, A J “The Role of the Judiciary in Reforming Landlord and Tenant Law” [1976] MelbULawRw 13; (1976) 10 MULR 459; Hicks, J F “The Contractual Nature of Real Property Leases” (1972) 24 Baylor LR 443; Donahue C Jr, “Change in the American Law of Landlord and Tenant” (1974) 37 Mod LR 242.
[2] See, eg, the legislation on forfeiture of lease for breach of covenant by the tenant, below, n124. A further illustration is the legislation in New South Wales, Victoria and Tasmania permitting the residue of fixed-term leases of at least 300 years duration to be enlarged into fee simple estates by declaration in deed form where the unexpired residue of the term is at least 200 years: Conveyancing Act 1919 (NSW), s134; Property Law Act 1958 (Vic), s153; Conveyancing and Law of Property Act 1884 (Tas), s83.
[3] Two relevant reports were produced. The first was a specialist report on landlord and tenant law reform: Bradbrook, A J, Poverty and the Residential Landlord and Tenant Relationship (1975) AGPS, Canberra. The second was a chapter in the final report of the Poverty and the Law Commissioner: Sackville, R, Law and Poverty in Australia (1975) AGPS, Canberra, ch3.
[4] For a discussion of the historical development of the law, see Bradbrook, A J “The Evolution of Australian Landlord and Tenant Law” in Ellinghaus, M P, Bradbrook, A J, and Duggan, A J (eds), The Emergence of Australian Law 1989 ch6.
[5] Bradbrook, A J, above n3 at chs 3, 4, 12.
[6] Sackville, R, above n3 at 101–103.
[7] This is the origin of the principle that rent issues out of the land.
[8] For a discussion of the law of fixtures, see Bradbrook, A J, MacCallum, S V and Moore, A P, Australian Real Property Law (2nd edn, 1997) ch15; Butt, P, Land Law (3rd edn, 1996) pars 221ff.
[9] For example, the courts have held that a wartime expropriation of the leased premises by the government did not destroy a lease as possession was not terminated by title paramount: Minister of State for the Army v Dalziel [1944] HCA 4; (1944) 68 CLR 261. See also Thearle v Keeley (1958) 76 WN (NSW) 48.
[10] In the past 20 years, Australian common law has developed so as to recognise the application of contractual principles to leases. See Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620; Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17; Wood Factory Pty Ltd v Kiritos Pty Ltd (1985) 2 NSWLR 105; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623. See also Effron, J, “The Contractualisation of the Law of Leasehold: Pitfalls and Opportunities” [1988] MonashULawRw 3; (1988) 14 Monash U LR 83; Bradbrook, A J and Croft, C E, Commercial Tenancy Law in Australia, (2nd edn, 1997) pars 16.27ff.
[11] See eg, Schoshinski, R S, “Remedies of the Indigent Tenant: Proposal for Change” (1966) 54 Georgetown L J 519.
[12] See Comment, “Housing the Poor: A Study of the Landlord-Tenant Relationship” (1969) 41 U Colorado LR 541 at 557.
[13] See eg, Trade Practices Act 1974 (Cth), parts 5 and 5A.
[14] Bradbrook, A J, above n3 at 62ff; Sackville, R, above
[15] Residential Tenancies Act 1987 (NSW); Residential Tenancies Act 1987 (WA).
[16] Residential Tenancies Act 1994 (Qld). Note that this repeals an earlier Act of the same name, the Residential Tenancies Act 1975 (Qld), which predates the publication of the Poverty Inquiry reports. Despite the similarity of nomenclature, the 1975 Act was much shorter and less effective than the post-Poverty Inquiry legislation and made little contribution to the development of this area of the law.
[17] In the Territories, certain reforms are contained in the Tenancy Act 1979 (NT) and the Landlord and Tenant Act 1949 (ACT). For reform considerations in Tasmania, see Bradbrook, A J, “Residential Landlord-Tenant Law Reform in Tasmania” [1978] UTasLawRw 6; (1978) 6 U Tas LR 83.
[18] NSW, part 6; Vic, part 11; SA, part 3.
[19] NSW, s111; Vic, s479; SA, s41; WA, s26.
[20] NSW, ss57–84; Vic, part 10; Qld, ss57–84; SA, ss61–63; WA, ss29 and 31.
[21] NSW, ss12 and 42–43; Vic, ss50–58; Qld, s77; SA, ss50 and 73, WA, ss27–28 and Schedule 1.
[22] NSW, part 5; Vic, parts 6 and 7; Qld, Chapter 4, SA, part 5; WA, part V.
[23] NSW, ss77–79; Vic, part 9; Qld, s229, SA, s97; WA, s79.
[24] NSW, ss23, 25–27, 30; Vic, ss61–65, 68, 72–80; Qld, ss103 and 106; SA, ss67–70; WA, ss3 and 42–43.
[25] NSW, ss44–52; Vic, ss45–48; Qld, ss53–54; SA, ss55–56; WA, ss30 and 32.
[26] NSW, s15; Vic, s211(e); Qld, s230; SA, s78; WA, s58.
[27] Vic, s30; SA, s52; WA, s56.
[28] While the initial Residential Tenancies Acts of 1978 and 1980 in South Australia and Victoria were repealed and replaced by new legislation in 1995 and 1997, respectively, the new Acts contain few reforms of substance and in most instances repeat the terms of the earlier Acts.
[29] In some Canadian jurisdictions residential tenancies legislation dates from the 1960s. See eg, Ontario, which introduced its legislation in 1969: Landlord and Tenant Amendment Act, Stats Ont 1968–69, c58.
[30] After the enactment in South Australia and Victoria of residential tenancies legislation, tenants of small commercial premises, particularly those located in shopping centres, began to lobby for similar, though not identical reforms, based on the argument that like residential tenants they lacked sufficient bargaining power to obtain fair terms in their leases. This agitation ultimately led to the enactment in five States of retail tenancies legislation: Retail Leases Act 1994 (NSW); Retail Tenancies Act 1986 (Vic) (now repealed and replaced by the Retail Tenancies Reform Act 1998 (Vic)); Retail Shop Leases Act 1994 (Qld); Retail Shop Leases Act 1995 (SA); Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA). On this subject, see Bradbrook, A J and Croft, C E Commercial Tenancy Law in Australia (2nd edn, 1997) chs 23–27.
[31] See eg, Family Law Act 1975 (Cth), part VIII; Fair Trading Act 1987 (NSW); Manufacturers’ Warranties Act 1974 (SA); Door to Door Trading Act 1987 (WA).
[32] This Covenant entered into force for Australia on 10 March 1976. Article 1 states: “The States Parties to the present Covenant recognize the right of everyone to an adequate standard of living for himself and his family, including adequate food, clothing and housing, and to the continuous improvement of living conditions. The States Parties will take appropriate steps to ensure the realization of this right, recognizing to this effect the essential importance of international cooperation based on free consent” (emphasis added).
[33] See Devereux, A, “Australia and the Right to Adequate Housing” (1991) 20 Fed LR 223.
[34] Legislation controlling excessive rent must be distinguished from rent control legislation. The former applies to individual landlords, and only arises on application by tenants and after a court or tribunal determination, while rent control systems are applied globally to certain categories of premises regardless of the level of earlier rents charged by individual landlords.
[35] NSW, ss46–49; Vic, ss45–48; SA, s56; WA, s32.
[36] See eg, Racial Discrimination Act 1975 (Cth); Sex Discrimination Act 1984 (Cth); Equal Opportunity Act 1984 (SA).
[37] Bradbrook, above n3 at 44; Sackville, above
[38] See eg, Human Rights and Equal Opportunities Commission, Our Homeless Children: Report of the National Enquiry into Homeless Children (hereinafter Burdekin Report), Canberra, 1989 at 36; Devereux, above n33 at 225.
[39] See n32, above, and accompanying text.
[40] In France, for example, the relevant legislation declares the right to housing to be a basic right. Article 1 of the Loi no 89–462 (6 July 1989) states: “Le droit au logement est un droit fondamental”.
[41] Commonwealth v Tasmania [1983] HCA 21; (1983) 158 CLR 1.
[42] This requirement has been enacted into law in France. Article 60 of the Loi no 82–526 (22 June 1982) states in part: “When construction work aimed at energy conservation is undertaken by the owner in respect of a building or a group of buildings with a contractual guarantee of results, the owner may increase the rent in derogation of the terms of Title IV. This increase, calculated according to a method fixed by decree, must not exceed the value of the guaranteed energy saving”. [author’s translation]
[43] Systems of generally-applicable rent control were enacted by the Commonwealth government during the second world war: National Security (Fair Rents) Regulations (No 104) 1939 (Cth) and National Security (Fair Rents) Regulations (No 62) 1941 (Cth) and were continued after the war by the States. Such legislation still survives in New South Wales (Landlord and Tenant (Amendment) Act 1948, (NSW)) and Victoria (Landlord and Tenant Act 1958, (Cth) part V), although has been repealed elsewhere. These systems must be distinguished from excessive rent controls contained in the majority of the current residential tenancies statutes (NSW, ss46–49; Vic, ss45–48; SA, s56; WA, s32.). For a discussion of this fundamental distinction, see Bradbrook, A J, MacCallum, S V and Moore, A P, Residential Tenancies Law and Practice (1983) at pars 1201ff.
[44] See Residential Tenancies Act 1986 (NZ), ss76, 88–90 and 99–100. Mediation is also promoted under the terms of some of the existing residential tenancies statutes: see NSW, s109; Qld, ss231–347; SA, s34; WA, s23.
[45] The exclusive possession test was affirmed in Australia in Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209. See also Lapham v Orange City Council (No 2) [1968] 2 NSWR 667; Goldsworthy Mining Ltd v Federal Commissioner of Taxation [1973] HCA 7; (1973) 128 CLR 199; Lewis v Bell (1985) 1 NSWLR 731.
[46] For a discussion of the historical development of Australian landlord and tenant law, see Bradbrook, A J, above n4.
[47] See n11, above, and accompanying text.
[48] Conveyancing Act 1919 (NSW), ss23B(1), 23D(2); Property Law Act 1958 (Vic), ss52(1), 54(2); Property Law Act 1974 (Qld), s10; Law of Property Act 1936 (SA), ss28(1), 30(2); Property Law Act 1969 (WA), ss33(1), 35(2); Conveyancing and Law of Property Act 1884 (Tas), s60.
[49] Such Tribunals currently exist in New South Wales, Victoria and South Australia. Note that in Victoria, as a result of the Victorian Civil and Administrative Tribunal Act 1998, the Tribunal is constituted as the Residential Tenancies List of the Civil Division of the Victorian Civil and Administrative Tribunal. This reform has had no major practical effect on the hearing and determination of residential tenancy disputes. Information supplied by the Deputy President of the Tribunal.
[50] Information supplied by Ms S Raymond, Presiding Member of the South Australian Residential Tenancies Tribunal, July 1997.
[51] See SA, s100.
[52] NSW, s80 and Schedule 1; SA, s12(5).
[53] See eg, WA, s26(2).
[54] According to the Presiding Member of the South Australian Residential Tenancies Tribunal, Ms S Raymond approximately 75 per cent of all applications are lodged by or on behalf of landlords.
[55] See eg, NSW, s80(1).
[56] Currently three of the fifteen members of the South Australian Tribunal are not legally qualified.
[57] Information supplied by Ms Raymond, Presiding Member, South Australian Residential Tenancies Tribunal.
[58] The Tasmanian public housing authority, Housing Tasmania, also possesses this power under the Substandard Housing Control Act 1973 (Tas). At present this does not pose a problem of overlapping jurisdiction as there is no Residential Tenancies Tribunal in Tasmania.
[59] Residential Tenancies Act 1995 (SA), s56.
[60] See Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620; Progressive Mailing House v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623.
[61] NSW, s116.
[62] See eg, SA, ss44–45.
[63] In South Australia, for example, the penalty is $2,000 or gaol for a maximum period of six months or until the contempt is purged.
[64] See Residential Tenancies Act 1987 (WA), s12.
[65] Bradbrook, A J, above n3, ch1; Sackville, R, above
[66] Residential Tenancies Act 1986 (NZ), ss87–88.
[67] Retail Leases Act 1994 (NSW), part 8; Retail Shop Leases Act 1994 (Qld), parts 8 and 9; Retail Shop Leases Act 1995 (SA), part 9; Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA), ss19–21.
[68] NSW, s4; Vic, s4; Qld, ss1516; WA, s4.
[69] See Bradbrook, A J, MacCallum, S V and Moore, A P, above n8 at pars 446ff.
[70] Section 5(2) states that the Housing Trust is only subject to the following provisions: part 3 (Residential Tenancies Tribunal); s66 (security of premises); s71 (tenant’s conduct); s90 (Tribunal may terminate tenancy where the tenant’s conduct is unacceptable); s93 (order for possession); s99 (enforcement orders for possession); Div 3 of part 8 (powers of Tribunal); Div 4 of part 8 (representation).
[71] Pursuant to the terms of the Commonwealth State Housing Agreement each state has established an independent review mechanism for public housing applicants. The first such body, entitled the Public Housing Appeal Panel, was established in South Australia in 1992.
[72] Bradbrook, A J, above n3, ch17; Sackville, R, above
[73] See above, n32, and accompanying text.
[74] For a discussion of administrative law remedies in this context, see Bradbrook, A J, MacCallum, S V and A P Moore, above n8, ch17; Bradbrook, A J, “The State Housing Commissions and their Tenants: The Need for Legislative Control” [1976] MelbULawRw 5; (1976) 10 MULR 409.
[75] See eg, Residential Tenancies Act 1997 (Vic), part 4; Residential Tenancies Act 1994 (Qld), part 6.
[76] NSW, ss3, 6; Vic, ss7–8; Qld, ss8, 10; SA, s3; WA, ss3, 5.
[77] Cf Residential Tenancies Act 1986 (NZ), s2(3).
[78] See above n67.
[79] For a discussion of the British legislation, see Gray, K J, Elements of Land Law (2nd edn, 1993) at 766–776. The position in France is similar, except that the sale by a landlord to a third party without prior offer to the tenant is not an offence: see La loi no 89–462 (6 July 1989), article 15II.
[80] See above, nn36–45, and accompanying text.
[81] In the United States, some courts have gone further and held landlords liable for the physical security of their tenants and their tenants’ property. See eg, Adams, C D, “Security Against Criminal Acts: The Landlord’s New Liability” (1979) 42 Tex BJ 201; Henszey, B N, “What Is The Landlord’s Responsibility for Criminal Acts Committed on the Premises” (1977) 6 Real Estate LJ 104; Comment, “Landlord and Tenant — Landlord May Be Liable for Theft After Suitable Notice of Defective Lock” (1976) 7 Seton Hall LR 683.
[82] See eg, Bergmann, G, Bruno, R, and Horster, H, “Energy Conservation in Buildings” in Kreider, J F, and Kreith, F (eds) Solar Energy Handbook (1981) ch29; Lincoln, G A, “Energy Conservation”, in Abelson, P H, (ed), Energy, Use, Conservation and Supply (1974); Report of the Workshop of Alternative Energy Strategies, Energy, Global Prospects 1985–2000 (1977).
[83] For a discussion of this jurisdiction, see Bradbrook, A J, Energy Conservation Legislation for Building Design and Construction, Canadian Institute for Resources Law, Calgary, 1992, ch2.
[84] See Bradbrook, A J, “The Development of Energy Conservation Legislation for Private Rental Housing” (1991) 8 Envt’l and Plan L J 91.
[85] Id at 100–103.
[86] La loi no 82–526 of 22 June 1982, article 60(I).
[87] [1976] UKHL 1; [1977] AC 239. See also Karaggianis v Malltown Pty Ltd (1979) 21 SASR 381.
[88] Note the power contained in Vic, s28 and SA, s76 to declare void or vary a term of the tenancy agreement if it is satisfied that the term is harsh or unconscionable. Cf NSW, s10; WA, s84. Cf also s6(1) of the Ontario Residential Tenancies Act, RSO 1980, c 452, which states: “In addition to the benefits and obligations contained in the form of tenancy agreement set out in the Schedule, a landlord and tenant may provide in a written tenancy agreement for other benefits and obligations which do not conflict with this Act, but where an obligation concerns the tenant’s use, occupancy or maintenance of the rental unit or residential complex or use of services and facilities provided by the landlord, the obligation cannot be enforced unless it is reasonable in all the circumstances”.
[89] NSW, s23; Vic, s60; Qld, s102; SA, s71; WA, s39.
[90] Compare s38(1)(b) of the Ontario Residential Tenancies Act, RSO 1980, c 452, which states: “A tenant shall not unreasonably interfere with, .... (b) the enjoyment for all usual purposes by the landlord or any other tenant or members of their households, of the residential complex or any other rental unit”.
[91] Note the exception contained in SA, s90, whereby actions can be brought by an “interested person”.
[92] See eg, Armory v Delamirie (1722) 1 Stra 505; [1722] EWHC KB J94; 93 ER 664; Parker v British Airways Board [1982] 1 All ER 834; Hannah v Peel [1945] 2 All ER 288; Willey v Synan [1937] HCA 85; (1937) 57 CLR 200. For a recent discussion of this area of law, see Hoath, D C, “Some Conveyancing Implications of ‘Finding’ Disputes” [1990] Conv 348.
[93] Vic, s30; SA, s52; WA, s56.
[94] See above n36.
[95] Article 1899 specifies that punitive damages may be awarded where this provision is violated.
[96] The excessive rent provisions are contained in NSW, ss46–49; Vic., ss45–48; SA, s56; WA, s32. The rent increases provisions are contained in NSW, s45; Vic, s44; Qld, s53; SA, s55; WA, s30.
[97] The factors differ slightly between the jurisdictions. The following are the most common: the cost of goods, services and facilities provided with the premises; any charges in respect of the premises for which the landlord is or may be liable; the state of repair and general condition of the rented premises; any goods, services or facilities provided by the tenant or charges payable by the tenant; any work which the tenant has, with the landlord’s consent, done or has agreed with the landlord to do in relation to the premises; and any valuation of the rented premises.
[98] Rental of Residential Property Act, SPEI 1988, ch58, s23.
[99] See eg, Landlord and Tenant (Amendment) Act 1948 (NSW), s38.
[100] SA, s73 and reg172 of 1995.
[101] Bradbrook, A J, above n3, ch4; Sackville, R, above
[102] NSW, ss256; Vic, ss6162; Qld, ss103, 106; SA, ss6869; WA, ss38, 42.
[103] See eg, Trade Practices Act 1974 (Cth) s71; Fair Trading Act 1987 (WA), s38; Manufacturers’ Warranties Act 1974 (SA) subs4(2).
[104] This is the approximate wording of the Civil Code of Quebec, article 1933.
[105] For illustrations of the operation of this rule, see John Betts & Sons Ltd v Price (1924) 40 TLR 589; Re Teller Home Furnishers Pty Ltd [1967] VicRp 35; [1967] VR 313 at 320; 195 Crown Street Pty Ltd v Hoare [1969] 1 NSWR 193; Picton-Warlow v Allendale Holdings Pty Ltd [1988] WAR 107.
[106] For a critique of this legislation, see Bridge, S, “Former Tenants, Future Liabilities and the Privity of Contract Principle: The Landlord and Tenant (Covenants) Act 1995” [1996] Camb LJ 313; Walter, P, “The Landlord and Tenant (Covenants) Act 1995: A Legislative Folly” [1996] Conv 432.
[107] Massart v Blight [1951] HCA 20; (1951) 82 CLR 423; Morison v Hall [1922] VicLawRp 83; [1923] VLR 93.
[108] Vic, s81; WA, s49; NT, s57. Cf SA, subs74(2)(b), point 1.
[109] See eg, Henderson, R F, Consultation and Government (1981) Victorian Council of Social Service, Melbourne, part V.
[110] Cobb v Stokes [1807] EngR 243; (1807) 8 East 358; 103 ER 380.
[111] NSW, ss58–59; Vic, s263, 123; Qld, ss165, 181; SA, ss83, 86; WA, ss64, 68.
[112] NSW, ss56–57, 70; Vic, ss243–260; Qld, ss166–171, 182–187; SA, ss80–82, 85; WA, ss72–75. Note that s261 of the Victorian Legislation specifies that the landlord must serve a notice to vacate on the tenant where the landlord wishes to recover possession of the rented premises at the end of a fixed-term tenancy agreement.
[113] See eg, Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620; Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17; Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 63 ALJR 372.
[114] Article 1974 reads: “A lessee may resiliate the current lease if he is allocated a dwelling in lowrental housing; .... He may also resiliate the current lease if he can no longer occupy his dwelling because of a handicap or, in the case of an elderly person, if he is admitted permanently to a residential and long-term care centre or to a foster home, whether or not he resides in such a place at the time of his admission. Unless otherwise agreed by the parties, resiliation takes effect three months after the sending of a notice to the lessor, with an attestation from the authority concerned, or one month after the notice if the lease is for an indeterminate term or a term of less than twelve months”.
[115] The Residential Tenancies Tribunal is already bound to consider the issue of comparative hardship in certain circumstances: see eg, Vic, 233(1).
[116] NSW, s57; Vic, 246; Qld, s155; SA, s80(2); WA, s62. The period specified in Queensland and Western Australia is seven days.
[117] Article 1971 reads: “The lessor may obtain the resiliation of the lease if the lessee is over three weeks late in paying the rent or, if he suffers serious prejudice as a result, where the lessee is frequently late in paying it”.
[118] See eg, Qld, s170.
[119] See n92, above.
[120] Residential Tenancies Act, RSO 1980, 452, s50.
[121] See Vic, s266; SA, s84; WA, s65.
[122] In South Australia, the Tribunal uses the following formula to allocate these costs between the parties. In relation to the reletting fee, the tenant is liable for the following: letting fee multiplied by the number of weeks remaining in the tenancy after reletting, divided by three-quarters of the total period of the fixed term or terms (in weeks). In relation to the advertising costs, the tenant is liable as follows: total advertising costs multiplied by the number of weeks remaining in tenancy after abandonment, divided by three-quarters of the total period of the fixed term or terms (in weeks).
[123] Compare Residential Tenancies Act 1986 (NZ), s65.
[124] For example, over retirement villages in New South Wales and South Australia: Retirement Villages Act 1989 (NSW), ss14–21; Retirement Villages Act 1987 (SA), ss7, 14.
[125] Qld, ss153–154, 173–174; SA, ss80, 85. Cf WA, s62.
[126] Conveyancing Act 1919 (NSW), s129(1); Property Law Act 1958 (Vic), s146(1); Property Law Act 1974 (Qld), s124(1); Landlord and Tenant Act 1936 (SA), s10; Property Law Act 1969 (WA), s81(1); Conveyancing and Law of Property Act 1884 (Tas), s15(1).
[127] See eg, Expert Clothing Service and Sales Ltd v Hillgate House Ltd [1986] 1 Ch 340; Bass Holdings Ltd v Morton Music Ltd [1988] 1 Ch 493; Rugby School (Governors) v Tannahill [1935] 1 KB 87.
[128] See eg, Moore v Ullcoats Mining Co Ltd [1907] UKLawRpCh 115; [1908] 1 Ch 575.
[129] See eg, Vic, ss6970.
[130] See nn18–27, above, and accompanying text
[131] See n41, above, and accompanying text.
[132] [1992] HCA 23; (1992) 175 CLR 1.
[133] (1996) 71 ALJR 173.
[134] For a discussion of native title legal issues in other jurisdictions, see eg, Hunt, M, “Minerals Development and Indigenous Peoples – Implications of the Mabo Case” (1993) 11 J Energy and Natural Resources L 155; Bartlett, R H, “Resource Development in Australia and Native Title Legislation” (1994) 1 Australasian J Natural Resources L and Policy 93.
[135] See Family Law Act 1975 (Cth), s48, which establishes the sole ground of dissolution of marriage that the marriage has broken down irretrievably.
[136] See Family Law Act 1975 (Cth), s79.
[137] Trade Practices Act 1974 (Cth), parts 5 and 5A.


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