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Chief Executive Officer (Housing) v Young & Anor [2022] NTCA 1

Category: Case Law
Date: 4 February 2022
Sub Category:Case Law
Place:
State/Country:Northern Territory, Australia
Subject Matter:Housing, Construction and Infrastructure | Law - Policy and Justice
URL: http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTCA/2022/1.html?context=1;query=[2022]%20NTCA%201%20;mask_path=
Summary Information:

Between

Chief Executive Officer, Housing (Appellant) and Enid Young and Petria Cavanagh in her capacity as Administrator of the Estate of Robert Conway (Deceased) (Respondents) 

Judge

Grant CJ, Southwood and Barr JJ

Judgment

This is a decision of the Northern Territory Court of Appeal (Court of Appeal) made on an appeal by the CEO of Housing from the decision in Young and Conway v Chief Executive Officer, Housing [2020] NTSC 59 (Young and Conway).

The grounds of appeal were that the Supreme Court had erred:

  1. in sending the claim for unconscionable conduct and repayment of rent back to the Northern Territory Civil and Administrative Tribunal (the Tribunal) for a determination to be made in favour of the applicants Young and Conway;
  2. by holding that the term 'habitability' in the RTA requires an overall assessment of humaneness, suitability and reasonable comfort assessed against contemporary standards; and
  3. in finding that the tenancy agreement was about providing enjoyment and relaxation free of interference.

The Court of Appeal held that the Tribunal did not have jurisdiction to hear the matter of whether the CEO of Housing had behaved unconscionably during the litigation process, and accordingly set aside the Supreme Court's order that it do so. However, there may be grounds for claiming in a court of law, within its jurisdiction of equity, that these agreements are invalid and as a result that compensation is payable.

The Court of Appeal also found that the Supreme Court's interpretation of the term 'habitable', under s 48 of the Residential Tenancy Act 1999 (NT) (RTA), was partly valid in that the meaning of habitable does indeed extend beyond health and safety to include reasonable comfort assessed against contemporary standards, but not however to assessments of 'humaneness' and 'suitability'. The CEO of Housing's appeal was dismissed on this ground.

Finding that tenants may seek compensation for mental distress and disappointment if they were to suffer physical inconvenience from a landlord's breach, the Court of Appeal held that the facts around any physical inconvenience had not been clearly established during the Tribunal's inquiry. Furthermore, a tenancy agreement does not provide compensation for a landlord failing to ensure a tenant's quiet enjoyment of the property. Accordingly, the appeal was allowed on this ground. 

Significance

It is now clear that the CEO of Housing has an obligation to provide tenants with premises that are reasonably comfortable by contemporary standards.

The decision also made clear that only a court of law within its jurisdiction of equity may hear claims in relation to unconscionable conduct.

This decision may lead to a resolution of the issues brought to the Tribunal in what is the first case to test the rights of people directly affected by the Northern Territory National Emergency Response Act 2007 (Cth) (the NTNERA), and what is more generally known as the Northern Territory Intervention.

The case may also offer guidance on how to further challenge the NTNERA.

Subsequent developments

On 4 March 2022, Ms Young applied for special leave to the High Court to consider the third issue of whether compensation for stress was payable by the CEO of Housing for having failed to provide secure premises or, in other words, the loss of quiet enjoyment of the property. If successful says, the Grata Fund's Acting Executive Director, Maria Nawaz, Ms Young's case will mean that "all renters in Australia could be better protected from dodgy landlords" (Grata Fund, 2022).

Detailed Information:

Background

In 1977, under the Aboriginal Land Rights (Northern Territory) Act 1976, control of the community of Santa Teresa moved from the Catholic Church to the Santa Teresa Land Trust. The Trust held the land on behalf of the Aboriginal community, who renamed the community Ltyentye Apurte (Find&Connect).


As the community now held the title to the land, they were able to manage their housing and determine the land's use.


However, on 18 August 2007, the Northern Territory National Emergency Response Act 2007 (Cth) (the NTNERA) commenced. This legislation granted the Commonwealth Government five-year leases over 64 Northern Territory Aboriginal communities, including the houses in Ltyentye Apurte, as part of the Northern Territory Emergency Response which is otherwise known as the Intervention.


The community continued to own the land, but they were no longer able to manage their own houses. This became the responsibility of the Federal Government who delegated this responsibility to the State Government, who in turn delegated the responsibility to the CEO of Housing, a corporation.

Litigation History

In February 2015, 70 public housing tenants from Santa Teresa, including the respondents, commenced proceedings against the CEO of Housing in the Northern Territory Civil and Administration Tribunal (Tribunal). As this was the first case to test the NTNERA, the  Tribunal was unsure whether this matter was within its jurisdiction and referred it to the Supreme Court of the Northern Territory (Supreme Court).


On 30 July 2018, Cavanagh v Chief Executive Officer (Housing) [2018] NTSC 52, Justice Southwood of the Supreme Court found that because the applicants were tenants, the Tribunal was the appropriate forum for disputes over tenancy agreements to be heard.


On 27 February 2019, the Tribunal heard and decided the tenants' complaints against the CEO of Housing in Various Applicants from Santa Teresa v Chief Executive Officer (Housing) [2019] NTCAT 7.

An appeal against the Tribunal's decision was then heard by Justice Blokland in the Supreme Court in Young and Conway v Chief Executive Officer, Housing [2020] NTSC 59 (Young and Conway). Blockland J's decision was significant in that it recognised the statutory requirement that properties be 'habitable' under the Residential Tenancy Act 1999 (NT) (RTA) extended beyond tenants' health and safety to include reasonable comfort assessed against contemporary standards. One of the appellants, Robert Conway, who was a tenant at Santa Teresa passed away before the decision was made.

Details of judgment

1 Unconscionable conduct and repayment of rent

The Court of Appeal found that the question of whether a party to the tenancy agreement had acted unconscionably must first be determined by a court of law within the jurisdiction of equity. The Tribunal may not otherwise vary or declare invalid that agreement [24].

Further, and agreeing with the Supreme Court's observation in Cavanagh v Chief Executive Officer (Housing) [2018] NTSC 52, the Court of Appeal noted that the Tribunal has an implied power under section 122(3) of the RTA to determine, on the merits of a case, whether stopping a landlord's claim for unpaid rent is appropriate [25]. However, noting that only an appropriate court may order compensation when no valid tenancy agreement exists, the Court concluded that the Supreme Court had erred in sending the claim for a determination on unconscionable dealings and repayment of rent back to the Tribunal [28].

The appeal was allowed on the ground.

2 Habitability

The Court of Appeal observed that as early as 1839, the concept of 'habitability' in general tenancy law has been concerned not only with health and safety but also with reasonable comfort and that this concept has been transposed unchanged into various legislation [33]. In the RTA for example, there are provisions that indicate a legislative intent that health and safety are not the only criteria for habitability [45].

Noting that the Supreme Court's interpretation of 'habitable' should not be followed in its entirety because the use of the terms 'humaneness' and 'suitability' are too vague to include in any court's assessment of what is 'habitable', the Court of Appeal held that the correct test for liability, apart from matters of health and safety, is reasonable comfort assessed against contemporary standards [48]-[50].

The appeal on this ground was dismissed.

Compensation for Distress and Disappointment

The Court of Appeal noted that the central object of a tenancy agreement is to provide the right to occupation of the premises in return for rent, not for quiet enjoyment [58]. While section 49 of the RTA requires a landlord to take reasonable steps to maintain the property so that the premises are reasonably secure, a landlord's obligation does not extend to protecting the tenant against loss of quiet enjoyment from anyone apart from the landlord themself [59].

However, compensation is indeed payable for breaches that directly cause a tenant physical inconvenience, such as having to constantly clean the premises due to a defect in the property [60]-[66].

So, whilst the Court of Appeal found that the Supreme Court had correctly decided that the CEO of Housing had breached the tenancy agreement by failing to provide a back door, it had gone too far in awarding compensation for distress and disappointment from the resulting lack of quiet enjoyment of the property [67].

The appeal was allowed on this ground.

Outcomes:

The appeal was allowed on the ground that the Supreme Court had erred in remitting the claims for unconscionable conduct and repayment of rent to the Tribunal for reconsideration.

The ground of appeal asserting that the Supreme Court's interpretation of the term 'habitable' was dismissed, and the matter was remitted to the Tribunal for reconsideration with the Court of Appeal's qualification of the term.

The appeal was allowed on the ground that the Supreme Court had erred in finding that a failure to provide enjoyment, relaxation, and freedom from interference was a breach of the tenancy agreement.


Related Entries

Organisation
  • Chief Executive Officer (Housing) - Appellant
  • Event
  • The Northern Territory Emergency Response
  • Legislation
  • Residential Tenancies Act 1999 (NT)
  • Aboriginal Land Rights (Northern Territory) Act 1976 (Cth)
  • Northern Territory National Emergency Response Act 2007 (Cth)
  • People
  • Enid Young and Petria Cavanagh in her capacity as Administrator of the Estate of Robert Conway (Deceased) - Respondent
  • Case Law
  • Various Applicants from Santa Teresa v Chief Executive Officer (Housing) [2019] NTCAT 7
  • Young and Conway v Chief Executive Officer, Housing [2020] NTSC 59
  • Cavanagh v Chief Executive Officer (Housing) [2018] NTSC 52

  • References

    General Reference
    Grata Fund (07/03/2022) MEDIA RELEASE: Fight for decent homes continues as Santa Teresa community appeals housing case to High Court

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