Australian Consumer Law: Tenancy

 

Pursuant to section 507A, parties may concurrently invoke the Australian Consumer Law and Fair Trading Act 2012 (Vic) (“ACL&FTA”). This can be done by checking the correct box on the General Application form. This means applications may be made for amounts greater than $10,000. Such applications may attract higher application fees. However, it is necessary to show the relationship was in trade and commerce (s 182 ACL&FTA). See the Tenants Union for more advice.

Under the ACL&FTA, VCAT may also consider the Australian Consumer Law (“ACL”), contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth). If cited as part of the application, VCAT may consider issues such as “misrepresentation” (ss 29–30 ACL), “unconscionable conduct” (ss 21–22 ACL), “unfair contract terms” (ss 23–28 ACL; s 185 ACL&FTA), “bait advertising” (s 35 ACL), guarantees as to “fitness for purpose” (s 61 ACL) and whether goods or services have been rendered with due skill and diligence (s 60 ACL).

The ACL&FTA also provides VCAT with a wide range of remedies to resolve disputes (ss 184–185; pt 8.2 ACL&FTA). For more information see Section 7: Consumers, contracts, the internet and copyright.

Personal injury claims

It may also be possible to make personal injury claims under the ACL&FTA for claims less than $10,000 (s 182(3)). However, parties are strongly advised to consult with a personal injuries expert before proceeding with any such claim at VCAT. Given the complexity, gravity, unique time limits and other issues arising out of such claims, parties may wish to use the Law Institute of Victoria Referral Service (see Legal representation).

Limitation of action period

Claims under contract can be made at any time up to six years after the alleged loss or damage has occurred. After such time, an application may be statute barred. In some cases, a persistent breach will simply have a reduced eligibility for compensation; in other matters, it may be fatal to a claim.

It is generally advisable to take action as soon as practicable, or pay careful attention to limitation dates.

Evidence

The success of the claim will depend on what the tenant is able to prove at VCAT. If the tenant makes a claim, the tenant has the onus of producing evidence that establishing on the balance of probabilities that:

the landlord breached the tenancy agreement or the RTA; and

the breach caused loss or damage (or occasionally, substantial quantifiable inconvenience); and

that the amount the tenant is claiming as compensation is reasonable.

Landlord’s breach of duty provisions

If the landlord or agent has committed certain breaches of the RTA or the tenancy agreement, the tenant should serve them with a Breach of Duty Notice in order to claim compensation (s 208).

The types of breaches for which a notice might be served are discussed in “Landlord and tenant duties”. This notice must:

specify the breach;

give details of the loss or damage caused by the breach;

require the landlord to remedy the breach or pay compensation within 14 days;

state that the landlord must not commit a similar breach again; and

state that if the notice is not complied with, an application may be made to VCAT.

The notice must be in writing, addressed to the person allegedly in breach of the duty and be signed by the person giving the notice (s 208). The tenant can give this notice in the form of a letter, however given the requirements of (s 208) it is advisable to use the prescribed Breach of Duty Notice form.

It is recommended that the tenant send the notice by registered mail in case of a dispute about service. Alternatively, if parties have consented within the meaning the Electronic Transactions (Victoria) Act 2000 (Vic), the notice may be served via email.

If the landlord does not pay the compensation claimed or comply within 14 days, the tenant may then apply to VCAT for a compensation or compliance order (s 209).

Other breaches

If the landlord or agent has breached the RTA or the tenancy agreement but the breach was not of a duty provision (e.g. damage was caused to the tenant’s goods during entry by the landlord or their agent), or if the claim is for repayment of moneys overpaid, the tenant may apply to VCAT without first serving any notice (s 210).

However, in some cases it is recommended that the tenant serve a notice on the landlord or agent even if the breach was not of a duty provision. This gives the landlord details of the claim, and an opportunity to agree to payment. The tenant’s application to VCAT for compensation must give details of the breach and of the loss or damage caused by the breach (r 7A.10(2) VCAT Rules).

Compensation claims by the landlord

The landlord may claim compensation from the tenant if:

the landlord has suffered loss or damage as a result of a breach of duty under the RTA or a tenancy agreement by the tenant; or

the landlord has paid more to the tenant than required under the tenancy agreement or RTA (ss 209, 210).

Defending the claim for compensation

If making a claim for compensation, the landlord bears the onus of proof and must establish that:

the tenant breached the tenancy agreement or RTA;

they have sustained loss or damage;

the loss or damage resulted from the tenant’s breach of the lease or the RTA; and

the amount they are claiming is reasonable.

The landlord must provide evidence in support of their claim, and must show the tenant or give the tenant copies of any documents or photos they present to VCAT.

It is prudent for parties to make a written request of any document they wish to see prior to the hearing. If a document is not provided prior to the hearing, parties may wish to consider requesting an adjournment on the basis of procedural fairness, or raise the issue with VCAT with respect to credibility.

According to VCAT Rule 7A.10(1), an application for compensation must state the amount of compensation being claimed.

While it is the landlord’s obligation to prove their claim, it is prudent for the tenant to provide any evidence that shows:

they did not breach any duty under the RTA or the tenancy agreement;

the breach did not cause the loss or damage claimed by the landlord; or

the amount claimed is excessive/unreasonable in the circumstances.

Landlord to minimise loss

If the tenant agrees that they are liable for some of the landlord’s losses, but believe that the amount the landlord is claiming is unreasonable, the tenant should provide evidence of this. The landlord has a duty to keep any loss they suffer to a minimum, and if they have not done so, they may not be entitled to claim compensation from the tenant.

Evidence from tenant

If the landlord is claiming an amount for repairs or replacement of property or fixtures (e.g. to replace carpet, or repaint rooms) that the tenant believes is excessive, the tenant should get quotations from tradespeople or shops to show this. If the property was damaged or worn before the tenant moved in, the tenant should also point this out. The tenant may wish to make a written request for the original receipts or invoices of when the particular items being claimed as needing repair were purchased as new, to raise the issue of age and whether the effective life of the item has been exhausted.

The landlord cannot claim the full cost of replacing something that was not new when it was damaged, and VCAT will generally allow for “depreciation” and “fair wear and tear”. The landlord’s actions in repairing the damage must also be reasonable and in proportion to the amount of damage caused.

The tenant should be prepared to argue about both their responsibility for the damage, and about the amount they should have to pay if VCAT finds that they are responsible.

Application for a review

A party who has been unable to or has not known about a hearing may apply for a review within 14 days of becoming aware of an Order (s 120 VCAT Act).

It can usually be identified that a party did not attend a hearing, at end of the VCAT Orders. A statement indicating no attendance by the party or their representative will usually be noted as part of the Orders.

Once the review has been lodged, the previous VCAT Orders are usually stayed and will not be enforceable until the matter has been reheard. If there are any doubts, parties should contact the VCAT registry.

Applications for review can be found on the VCAT website.

Once a review application has been lodged, VCAT will send out a Notice of Hearing to determine if a review should be granted. If the review is granted, the matter will immediate proceed reopen the substantive issues of the original application.

Parties should contact VCAT frequently once a review application has been lodged to ensure they do not miss the review hearing. If a party misses a review hearing and is seeking to make a second review application, they must get leave from VCAT and apply in person (4.19(2), 6.23 VCAT Rules).