A Lessor’s Duty Of Care – And The Extent Of Liability

The High Court of Australia is the penultimate Court in our country. Many associate it with determining extremely complex issues of law. So, it was somewhat surprising to see a matter involving a residential tenancy dispute make its way to the High Court.

The case of Young v Chief Executive Officer (Housing) [2023] HCA 31 involved a dispute between a Ms Young, an elderly First Nations woman living in an Aboriginal community in the Northern Territory.

The landlord was a corporation established under the Housing Act 1982 (NT).

Ms Young applied to the Civil and Administrative Tribunal of the Northern Territory for compensation for the distress and disappointment she experienced caused by the absence of a back door to her premises. For 68 months, the premises had no back door in the door frame.

The tenancy agreement was the standard form prescribed by the Housing Act, which provided that ‘the landlord will take reasonable steps to provide and maintain the locks and other security devices that are necessary to ensure the premises and ancillary property are reasonably secure’.

Section 49 of the Residential Tenancies Act 1999 (NT) made specific provision for security of premises. (Most State legislation contain specific provisions regarding security – eg section 210 Residential and Rooming Accommodation Act 2008 (QLD); section 70 Residential Tenancies Act 2010 (NSW).

Ms Young applied to the Tribunal under section 122 of the Residential Tenancies Act 1999 which provided: 

‘1. Subject to subsection (2), the Tribunal may, on the application of a landlord or tenant under a tenancy agreement, order compensation for loss or damage suffered by the applicant be paid to the applicant by the other party to the  agreement because: 

(a) The other party has failed to comply with the agreement or an obligation under this Act relating to the tenancy agreement….’.  

As stated above, the High Court is generally only concerned with cases which involve complex or important questions of law. 

In this case, there were 2 essential elements which the Court determined ought to be determined. The first was whether the damages which were claimed Ms Young were limited to existing common law principles surrounding contracts and if so the question whether the damages being sought were too ‘remote’ based on those principles.  

The majority of the Court found section 122 of the Act did not interfere with existing common law principles, it provided an additional and alternate mechanism for statutory compensation under the Act. 

In paragraph 25 of the decision, the majority stated: 

‘…the task of the Tribunal in each case is to arrive at a measure compensation which conforms to the purposes of the Act and to justice and equity of the case, having regard to the nature and purpose of the of the particular obligation with which there has been a failure to comply…’. 

At paragraph 29, the Court states: 

‘The evident obligation specified by s 49(1) of the Act to be a term of the tenancy agreement, with which [the landlord] failed to comply, is ensuring that premises occupied by a tenant for the purposes of residency are reasonably secure. For a tenant to be secure in the occupation of premises is for the tenant to reside there free from threat or harm or unwanted access. The feeling of insecurity which Ms Young experienced because of the landlord’s failure to provide the residential premises with a back door was the obverse of the security which it was the purpose of that obligation to serve’.  

The minority decision fond that the object of the Act, and in particular s 49(1), was to ensure both the physical but also psychological safety and security of tenants. 

There have been ample case decided by Courts and Tribunals where tenants have been awarded damages for physical inconvenience involved (e.g. un-liveability, water leaks, mould etc), but those damages generally equated to something akin to abatement or reduction of rent. 

In this case however, the breach resulted in the landlord being liable for compensation for mental distress 

Conclusion 

It must be stressed that every case must be judged on its own facts and will involve interpretation of different facets of legislation and contracts. 

However, in saying that, all residential tenancies legislation in Australia creates obligations on landlords with respect to the tenancy and the tenant(s). 

Heed should be taken of this High Court decision as it may have significant implications for the residential tenancy sector.