FEDERAL COURT OF AUSTRALIA

Worrall v Commissioner for Housing for the Australian Capital Territory

[2002] FCAFC 127

APPEAL – Residential Tenancies Tribunal – appeal against judgment on appeal from decision of the Residential Tenancies Tribunal refusing rent reduction under s 71 of the Residential Tenancies Act 1997 or alternatively compensation for breach of prescribed term 52 -– consideration on appeal of ground of complaint not raised before the Residential Tenancies Tribunal – whether gardens and lawns were part of the “premises” referred to in the Acknowledgment of Tenancy – they were not – whether the Tribunal was in error in not fixing damages because the particular degree of inconvenience and annoyance suffered by the appellant could not be specified – it was not – whether the Tribunal erred in its assessment of the extent of the diminution of the appellant’s enjoyment of the premises – it did not – whether it was necessary to find a “significant diminution” in order to make an award of compensation – it was – whether the Tribunal was guilty of appealable error in failing to find the appellant’s “use or enjoyment of the premises” had “diminished significantly” as a result of the works undertaken about the demised premises – it was not – whether the Tribunal was guilty of an error of law in concluding that prescribed term 52 was not breached if the respondent carried out necessary repairs and renovations in a reasonable manner – it was, but error was not fatal to result – extent of appellate jurisdiction conferred by s 126 of the Residential Tenancies Act 1997 to review of findings or inferences.

Residential Tenancies Act 1997 (ACT)

Australian Capital Territory (Self-Government) Act 1988 (Cth)

Re Nelson’s Wine Tavern [1973-74] SALCR 230

State Government Insurance Commission v Fiorenti (1991) Aust Torts Reports ¶ 81-114

Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389

Owen v Gadd [1956] 2 QB 99

Sanderson v Mayor of Berwick-on-Tweed (1884) 13 QBD 547

Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185

Telex (Australia) Pty Ltd v Thomas Cook & Son (Australasia) Pty Ltd [1970]2 NSWR 257

Haig v Chesney [1925] SASR 82

Aldin v Latimer Clarke, Muirhead & Co [1894] 2 Ch 437

Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207

Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd R 1

Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15

Reid House Pty Ltd v Beneke (1986) 5 ACLC 451

Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321

ANTHONY WORRALL v COMMISSIONER FOR HOUSING FOR THE AUSTRALIAN CAPITAL TERRITORY

A51 of 2001

MILES, RYAN & HIGGINS JJ

15 May 2002

CANBERRA

ON APPEAL FROM THE SUPREME COURT

OF THE AUSTRALIAN CAPITAL TERRITORY

THE COURT ORDERS THAT:

1.      The appeal be dismissed with costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM THE SUPREME COURT OF THE

AUSTRALIAN CAPITAL TERRITORY

REASONS FOR JUDGMENT

THE COURT:

1                     The appellant was, and since 21 March 1996 had been, a tenant of the respondent, a statutory authority appointed pursuant to the Housing Assistance Act 1987 (ACT).  The lease of the premises was effected by an “Acknowledgment of Tenancy” of that date.  The premises leased were identified as 8/16 Northbourne Flats, Braddon in the Australian Capital Territory.

2                     The premises leased by the appellant were part of a block of flats similarly let to other tenants.  At least some of the tenants, including the appellant, were entitled to and received the benefit of rental rebates under the Public Rental Housing Assistance Program.

3                     The tenancy became subject to the Residential Tenancies Act 1997 (ACT) (the “Act”) on 25 May 1998.  By virtue of s 4 thereof, the Act became applicable to all tenancy agreements then in existence as well as those entered into after the commencement day (25 May 1998).

4                     The Act, relevantly, deemed all residential tenancy agreements to contain “the prescribed terms” (s 7).  Unless the Residential Tenancies Tribunal (the “Tribunal”) has determined otherwise, inconsistent terms are deemed to be void (s 8).  The Act was made pursuant to recommendations of the Community Law Reform Committee of the Australian Capital Territory, Report No 8, “Private Residential Tenancy Law”.  There was a further Report (No 16) which recommended the extension of the Act to ‘public tenancies’, that is, those entered into by or with the respondent.  That Report (No 16) was tabled in the Legislative Assembly on 25 September 1997.  Report No 8 had been tabled in December 1994.

5                     On 10 August 1999, the appellant and other tenants of Northbourne Flats wrote to the respondent complaining that, since January 1999, they had been subjected to:

“. . . excessive levels of noise and general interference with their reasonable peace, comfort and privacy.”

6                     There were, the respondent conceded in reply on 27 August 1999, works that the respondent had considered reasonably necessary being conducted on and around the blocks of units comprising the complex known as “Northbourne Flats”.  These were “drainage and roof works”.  The respondent asserted that inconvenience and annoyance to tenants had been kept to a minimum.

7                     There was also a letter dated 16 August 1999 from the appellant, in somewhat more detail, referring to the schedule of standard terms authorised by s 7 of the Act.  He alleged that the works on and about the units had breached his rights, quoting term 52:

“The lessor shall not cause or permit any interference with the reasonable peace, comfort or privacy of the tenant in the use by the tenant of the premises.”

8                     There was further correspondence, to similar effect, between the appellant and the responsible ACT Minister, Mr Brendan Smyth, and the Minister for Health, Mr Michael Moore.

9                     Finally, on 11 November 1999, the appellant applied for relief to the Tribunal seeking the exercise of the jurisdiction conferred on it by the Act, s 115 (“… to hear and decide any matter that may be the subject of an application to it under this Act or the prescribed terms”). 

10                  Section 73 permits any party to a residential tenancy agreement to “apply for a resolution of a tenancy dispute”.

11                  The appellant identified the relevant dispute as:

“Application for rent reduction under s 71 RTA and in the alternative, an order for compensation for breach of prescribed term 52.”

12                  The statement of particulars further specified the claim as being for:

“(4) ... a rent reduction under paragraphs 71(1)(b) and (c) of the Residential Tenancies Act 1997, of $27.30 per week, representing fifty percent of the weekly rent payable by the tenant, for the period 22 March 1999 until 18 October 1999, a period of thirty weeks, and reimbursement under subsection 71(3) of the amount representing the difference between the rent paid and the reduced rent payable.”

13                  Alternatively, the appellant sought compensation in an equivalent sum.

14                  The facts relied upon to warrant the making of those orders (and said to constitute the breach of term 52) were stated as follows:

“9.  Between March 1999 and November 1999 the lessor carried out major  works at the Northbourne Flats complex.

10.         Throughout this time the work was constant and regeneration of the garden and green areas is still not complete.

11.         The work involved contemporaneous major roof replacement and sewerage and drainage “rehabilitation”, requiring full scaffolding of consecutive blocks, excavation in various areas of the complex and areas being sectioned off.  Up to ten workers at any one time worked on site and the work involved heavy equipment including trucks, bulldozers and front end loaders.

12.         During this time the tenant’s use and enjoyment of his flat and the common areas was diminished in the following ways:

13.         Increased noise levels between 7.30am and 5pm, over a lengthy period, including noise from electrical tools, heavy equipment, trucks and bulldozers.

14.         Impeded access between blocks of flats.

15.         Impeded access to visitor parking.

16.         Impeded access to garden areas.

17.         Destruction of garden areas.

18.         Recurring problem of mud.

19.         Loss of community, between the Applicant and other tenants, with the restricted access between blocks and destruction of gardens.

20.         Increased security risk from scaffolding.

21.         Diminished privacy generally and specifically, as workers worked from the scaffolding directly at the windows of the tenant’s flat.

22.         The sewerage works resulted in untreated sewerage spilling onto pedestrian footpaths outside Block 20.  The sewerage works outside Block 16 resulted in sewerage seeping around man-hole covers and flowing into a recently dug, uncovered hole directly outside Block 16.  The affected areas were not adequately or promptly cleaned.  The tenant could not avoid walking untreated sewerage into his flat.

23.         The Applicant is a pensioner who spends long periods in his flat.”

15        The application was heard by the Tribunal on 8 December 1999.

16                  Much of the appellant’s complaint related to the works involving the common garden areas appurtenant to the Northbourne Flats.  Some tenants, including the appellant, used a portion of the gardens for their own cultivation purposes.  The works, particularly the sewerage works, seriously interfered with these gardens.  The roofing works were also intrusive, involving the use of heavy machinery and scaffolding.  It was not suggested that these works were unnecessary or undertaken for any purpose other than the benefit of tenants generally.

17                  A decision on the application was delivered by Ms Jann Lennard, a member of the Tribunal, on 31 July 2000.

18                  The Tribunal accepted that there had, between March and November 1999, been major works on and about the block of flats in which the appellant was a tenant.

19                  The Tribunal was satisfied that inadequate notice of intent to carry out the works had been given.  It continued:

“Had the works undertaken in this case required access to the interior of the premises the Residential Tenancies Tribunal would have regarded the lack of adequate notice as grounds for the awarding of compensation.”

20                  It accepted that:

“…the private cars of the workers and subcontractors, caused significant problems for residents and did impede access to and from the premises.  Any resident who was not able to park a vehicle in their allotted space, or who had to park in a way which was unsafe would be entitled to compensation.”

21                  However, the appellant did not have a motor vehicle and so was not personally inconvenienced by those circumstances.

22                  The Tribunal nevertheless accepted that, during the construction period, the appellant:

“1        had his quite [scil. – quiet] enjoyment of his premises interfered with by noise and fumes from the machinery and the works.

2          experienced inconvenience in accessing his flat and in using his usual pathways to other parts of the complex and public transport.”

23                  The Tribunal accepted that indirect interference with a tenant’s occupation will breach the obligation to give quiet enjoyment.  It found that the evidence disclosed that:

“. . . the [appellant] was disturbed by noise and fumes and had experienced inconvenience in gaining access to and from his premises, but it did not show that he had never [scil. - ever] been unable to gain access, that he had ever been injured or that he had ever been unable to reside in his flat.  Further the evidence did not show that the [appellant] had ever been made ill by the fumes, sewerage spill or indeed the stress experience (sic) during the work.”

24                  Thus, in the Tribunal’s view, whilst there had been a breach of the obligation to give quiet enjoyment, it had not been sufficiently “significant” to warrant a rent reduction under    s 71.

25                  As to the claim for compensation for breach of term 52, the Tribunal noted that the respondent also had a duty to maintain and repair the premises.  The work itself was necessary though not done as unobtrusively as it might have been.

26                  Thus, as the Tribunal saw it, the question was:

“. . . whether the manner in which the work was conducted went beyond what was reasonably necessary to effect the repairs and renovations.”

27                  That question was answered in favour of the respondent.  The application was dismissed.

28                  On 9 January 2001, a Notice of Appeal was filed.  The grounds relied upon were:

“(1)     The Tribunal erred in its construction and application of section 71 Residential Tenancies Act 1997 (the Act).  In particular the Tribunal erred in its construction of the word “significantly” and in applying that construction to the Tribunal’s findings of facts.

(2)              The Tribunal erred in law in failing to take into account considerations  relevant to section 71, namely:

(a)   whether the loss of use of the gardens and lawns was a loss of a “facility” within the meaning of section 71 (1)(a)(i);

(b)   whether the loss of use of the gardens and lawns was a loss of part of the premises within the meaning of section 71(1)(b) having regard to the extended definition of “premises” in section 3 of the Act;

(c)    whether the tramping of mud into the premises arising from the Respondent’s construction work constitutes a breach of quiet enjoyment within the meaning of section 71(1)(c);

(d)   whether the Respondent’s permission for its trades persons to attend the premises in breach of prescribed term 82 of the Act is a breach of quiet enjoyment within the meaning of section 71(1)(c).

(3)       The Tribunal erred in construing and applying prescribed term 52 to be subject to the overriding tests of:

(a)   the reasonableness of the Respondent’s actions in discharging its obligations under prescribed term 55;

(b)   the reasonableness of the impact of the Respondent’s actions on the appellant’s peace, comfort and privacy.”

29        The appeal was determined by Crispin J on 13 July 2001.  It was dismissed with costs.

30                  In his reasons, his Honour did not accept that the “premises”, the use of which was denied to the appellant, included the grounds appurtenant to the complex.  The Residential Tenancy Agreement referred expressly only to a right of common user:

“. . . of the entrance hall lifts stairways and passages leading to the premises and laundries appurtenant to the building ...”

31                  His Honour noted that each tenant was bound by the terms of the Acknowledgment of Tenancy not to cause nuisance or annoyance to others:

“7.  The Tenant will not use the premises or any part thereof or permit them to be used, nor any other part of the building or the grounds surrounding adjoining or adjacent to the building, for any purpose which may be or become a nuisance annoyance inconvenience or disturbance to the Commissioner or to the tenants or occupiers of any other property in the neighbourhood.”

32                  But that term, his Honour concluded at [23], did not:

 “... of itself, provide any basis for an implication that the gardens were part of the demised premises or that the rental which the appellant seeks to have reduced was in any way referable to an entitlement to use them.”

33                  Thus, the reference in s 3 of the Act to “… any land … belonging to the premises,” did not include common areas such as the grounds and gardens appurtenant to the Flats.

34                  On hearing of the appeal before Crispin J, Mr Anforth, counsel for the appellant, sought to argue that the loss of use of the gardens and lawns had been a loss of a “facility” available to tenants thus enlivening the provisions of s 71(1)(a)(i) of the Act, even ifthey were not part of the demised premises.

35                  His Honour noted, however, that that contention had not been advanced before the Tribunal.  The argument had been confined to the application of s 71(1)(b) and (c).  Thus, his Honour concluded, that contention could not be considered on appeal.

36                  Notwithstanding this, his Honour expressed the view that the term “facilities” in s 71(1)(a)(i) was intended to refer to “such entitlements as the right to use shared bathrooms or laundries or other items of equipment intended to facilitate some action”.  Accordingly, even had the contention been before him, his Honour would have rejected it.

37                  In our view, whether or not that interpretation of the term “facilities” is correct, it was not an error for his Honour to have refused to allow the contention to be relied upon.

38                  The only right of appeal expressly granted to any party to a proceeding before the Tribunal is pursuant to s 126 of the Act.  That provides:

“(1) A party to a Tribunal hearing may appeal to the Supreme Court on a question of law from a decision of the Tribunal in that hearing.”

39                  The failure of the Tribunal to address an issue not raised before it cannot give rise to any error of law (or any other ground for complaint).  Thus, unless some injustice enlivened the jurisdiction of the Supreme Court under s 48A of the Australian Capital Territory (Self-Government) Act 1988 (Cth), Crispin J was right to decline to permit the appellant to raise a ground of complaint not raised before the Tribunal.

40                  Section 71 (1) of the Act empowers the Tribunal to order rent reductions.  It provides:

“(1)     On application by a tenant, the tribunal shall order a reduction in the rental rate payable under a residential tenancy agreement if it considers that the tenant’s use or enjoyment of the premises has diminished significantly as a result of any of the following:

(a)   the loss or diminished utility of an appliance, furniture, a facility or a service supplied by the lessor with the premises as a result of –

(i)                                                  the withdrawal of the appliance, furniture, facility or service by the lessor; or

(ii)                                                the failure by the lessor to maintain the premises and any appliance,  furniture or facility supplied with the premises in a reasonable state of repair, having regard to their condition at the commencement of the residential tenancy agreement; or

(iii)                                              the failure by the lessor to provide and maintain such locks or other  security devices as are necessary to ensure that the premises are reasonably secure;

(b)   the loss of the use of all or part of the premises;

(c)    interference with the tenant’s quiet enjoyment of the premises or the tenant’s ability to use the premises in reasonable peace, comfort and privacy by the lessor or any person claiming through the lessor or having an interest in, or title to, the premises.”

41                  It seems to us that, contrary to his Honour’s view, it is arguable that the garden areas appurtenant to the Flats did constitute a “facility” within the meaning of s 71(1)(a) of the Act but it is not necessary to decide that question in these proceedings.

42                  The question next addressed by his Honour was whether there was any appealable error in the Tribunal’s conclusion that, though there had been an “interference” with the “tenant’s quiet enjoyment” as referred to in s 71(1)(c), there was no entitlement to a reduction in rent unless the “quiet enjoyment” of the tenant had been “significantly diminished”.  The Tribunal  found, as a fact, that the interference, such as it was, was not, in the circumstances, significant.

43                  There was, in his Honour’s view, no error of law in that approach.  We agree with that view.  It is clearly correct.  The question whether enjoyment by a tenant of premises has been diminished “significantly” is one of fact not law.

44                  There was, in addition, a finding that there should be no compensation ordered because the respondent, in effecting the works complained of, had been obliged to carry out the same to ensure that tenants were not damaged by leaking roofs and inadequate sewerage.  His Honour held at [35]:

“However, the diminution in use or enjoyment contemplated by s 71 is a diminution in the tenant’s rights to use and enjoy the premises provided by the tenancy agreement.  One cannot make a judgment as to the extent, if any, to which those rights may have been diminished without regard for the terms of the agreement including any conferring rights upon the lessor.  A tenant cannot complain that his or her use or enjoyment has been diminished by acts authorised by provisions of the agreement because the rights to use and enjoyment conferred by the agreement are limited by such provisions.”

45                  Although the repair works might not have been executed with optimum efficiency, there was no contention that they were either unnecessary or carried out in an unreasonable manner.

46                  Whilst the respondent had a power to enter premises, whether the demised premises or other parts of the Northbourne Flats, to effect repairs there was no evidence that there had been any need for the respondent to enter the appellant’s premises.  The activities of the respondent, by its contractors, could not, therefore, have been in breach of cl 10 of the Acknowledgment of Tenancy.  That clause permitted entry to the demised premises “at all reasonable times”.

47                  Further, even accepting that there had been a diminution of the appellant’s quiet enjoyment, his Honour was not persuaded that the Tribunal had erred in concluding that there was no entitlement to compensation.  The appellant had not demonstrated any actual loss nor that he had been prevented from using the demised premises because of the works.

48                  On appeal to this Court, the appellant contended that neither the Tribunal nor his Honour had addressed the issue of loss of use of the gardens and lawns.  This argument was based on a contention that the gardens and lawns were part of the “premises” referred to in the Acknowledgment of Tenancy.

49                  There is no substance in this contention.  Whilst the gardens and lawns might have been a facility for the use and enjoyment of the tenants of the Northbourne Flats, they were not part of the demised premises.

50                  The next contention was that, accepting the Tribunal’s findings of interference with the enjoyment by the tenants, including the appellant, of their respective premises, the fact that the particular degree of inconvenience and annoyance suffered by him could not be, and was not, specified, did not relieve the Tribunal of the duty to fix damages.  His Honour, therefore, it was submitted, should have found the Tribunal to have been in error in not doing so.

51                  A further contention was that the Tribunal had erred in its assessment of the extent of the diminution of the appellant’s enjoyment of the premises.

52                  Certainly, the Community Law Reform Committee Report, in referring to losses which might justify a rent reduction, did not suggest that such a loss could not be a result of the performance of reasonable and necessary repairs.  It expressly referred to: “[488] (v) loss of use of garden, courtyard, storage or parking facilities” as justifying a rent reduction or compensation.

53                  That latter expression can only, of course, refer to such facilities as the lessor has provided whether or not they are within the demised premises or merely appurtenant to or connected with them.

54                  It should be noted, however, that the Report also recommended that the remedy of reduction of rental or an award of compensation to a tenant was to be made available:

[486] (supra) “... for property or financial loss only ... [and] ... not for personal suffering but for loss of facilities . . .  In an extreme case the tenant should be able to receive a 100% reduction in rent if the tenant is forced to find temporary alternative accommodation as a result of the premises becoming unlivable.”

55                  Section 71 reflects that intention as does the power vested in the Tribunal under s 104(d) of the Act to award compensation “for any other loss caused by the breach of a residential tenancy agreement”.

56                  It was further contended that, insofar as the breach of prescribed term 52 was to be considered with prescribed term 55, the former should not be read down by reference to the latter.  Thus, it was submitted, it was not necessary to find a “significant diminution” in order to make an award of “compensation”.  This contention should be considered with the contention referred to above in paragraph 50.

57                  Was the Tribunal guilty of appealable error in failing to find the appellant’s “use or enjoyment of the premises” had “diminished significantly” as a result of the works undertaken about the demised premises?

58                  The Tribunal was satisfied that there had been some adverse effect on the appellant’s use and enjoyment of the premises but not so much as might, for example, have led to tenants being forced to cease occupation.  The appellant was never forced to vacate nor did the demised premises become uninhabitable.  If the interference had been as extreme as that, prescribed terms 86 or 96(1)(d) might have been invoked (abatement of rent/termination of lease).  Thus, it may be accepted, as the appellant contends, that “significant diminution” may be constituted by something less than the rendering of the premises, temporarily or otherwise, uninhabitable.

59                  The word “significantly” is an ordinary English word to be interpreted in its context.  Thus, a proposal by a wine bar to make additions to licensed premises having the effect of adding 22 seats to the existing 122 was held not to “significantly” affect the “nature or extent” of the business.  “Significantly” was considered to mean much more than “appreciably”.  It was to be regarded as equivalent to “substantially or materially” (see Re Nelson’s Wine Tavern [1973-74] SALCR 230).  A similar approach was adopted in the personal injury context in State Government Insurance Commission v Fiorenti (1991) Aust Torts Reports ¶ 81-114 (Full Court of the Supreme Court of South Australia).  In that case, it was held that personal injury, to be “significant”, should be such as to have an “active adverse effect on the ability of the claimant to lead the sort of life the claimant normally led”.

60                  It does not seem to us that the test applied by the Tribunal differed from that.  It seems clear enough that the word imports a question of degree.

61                  The extent to which there is a judgment made that an accepted factual situation amounts to a “significant diminution”, is a question of fact not law (see Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389).

62                  Thus, there was no appealable error in the formulation of the question decided by the Tribunal nor in its conclusion, well open to it, that the described diminution of amenity was not “significant”.

63                  Was the Tribunal guilty of appealable error in concluding that prescribed term 52 was not breached if the respondent carried out necessary repairs and renovations in a reasonable manner?

64                  The prescribed terms themselves recognise that the condition of the demised premises creates rights in the tenant.

65                  Term 55 provides:

“(1)     The lessor shall maintain the premises in a reasonable state of repair having regard to their condition at the commencement of the tenancy.

(2)       The tenant shall notify the lessor of any need for repairs.”

66                  Term 86 provides:

“The lessor or the tenant may, by written notice, terminate the tenancy on a date specified in the notice on the following grounds:

(a)   the premises are not fit for habitation;”

67        Term 87 continues, relevantly:

“(3)     If neither the lessor or the tenant give notice of termination of the tenancy, the rent shall abate for the period that the premises are unable to be used for habitation . . .”

68                  In none of the terms is it suggested that, to enliven the lessee’s rights under terms 86 or 87, it should be determined that the lessor had acted unreasonably or failed to comply with term 55 so as to be in breach of the lease.  It is also true that, under the general law, there may be a breach of the covenant for quiet enjoyment by acts performed by or under the control of the lessor which are otherwise lawful.  Indeed, the offending acts may have been such that to have refrained from doing or permitting them would have breached other lawful obligations of the lessor.

69                  An illustration of such a situation, somewhat analogous to the present, is Owen v Gadd [1956] 2 QB 99.  The lessors had let a ground floor shop to the lessee.  To effect repairs to the upper floor, they caused scaffolding to be erected.  They did what they could to minimise inconvenience to the lessee.  They completed the repairs within a fortnight.  The scaffolding hindered, but did not prevent, access to the lessee’s premises.  It obscured his display of wares to some extent.

70                  Lord Evershed MR noted that the repairs were both necessary and urgent.  The scaffolding, though necessary, as His Lordship concluded at [107], to enable the repairs to be carried out, nevertheless amounted to an interference properly able to constitute a breach of the covenant for quiet enjoyment:

“It was said by Mr. Chapman ... that there could be no breach of the covenant for quiet enjoyment unless there was what he called an actual physical irruption into or upon the premises demised on the part of the landlords or some persons authorized by them by their actually entering upon or invading the premises, or by, e.g. the irruption thereon of water emitted from the landlords’ premises elsewhere.  In my judgment, that submission is not justified by the authorities.  I do not think that there is any sufficient warrant for such a limitation [upon the statements of Fry LJ in Sanderson v Mayor of Berwick-on-Tweed (1884) 13 QBD 547].  Concluding, therefore, as I do, that in this case the judge was entitled to find as a fact that the interference was substantial and that there was no principle of law which disqualified him from concluding as he did, I think that this appeal must fail …”

71                  Romer LJ agreed, adding however at 108:

“Then comes the question whether the degree of interruption be such as to constitute a ground for legal complaint or whether it should be merely dismissed on the ground of its being of a temporary character or on the ground of de minimis.  That appears to me to be essentially a question of fact to be determined by the judge who tries the action . . . I cannot see that the judge’s finding should be displaced by the considerations on which Mr Chapman relied, which may be summarized in this way: that the work of external repair which the lessors put in hand was reasonably necessary, that it was efficiently done and was done with all reasonable speed.  I do not think that those considerations are really relevant to the question of whether there has been a breach of the tenant’s contractual rights under the covenant for quiet enjoyment ...”

72                  Birkett LJ also agreed.

73                  To similar effect was the more recent decision of this Court in Hawkesbury Nominees Pty Ltd v Battik Pty Ltd [2000] FCA 185.  It had, in that case, been contended that failure to repair or maintain the premises’ exhaust system was, if anything, a breach of the covenant to repair, not of the covenant to give quiet enjoyment.  Further, though not relevant for present purposes, it was contended that the relocation of the fan powering the system had taken place before the lessee became the tenant.  The principle adopted, per Hill J at [37], was that:

“... there will be a breach of the covenant for quiet enjoyment where the ordinary and lawful enjoyment of the demised premises is substantially interfered with by the acts of the lessor or those lawfully claiming under him, whether or not the title to the land or the possession of the land is otherwise affected.  Whether what is complained of amounts to a substantial interference will be a question of fact.  A breach may result either from acts of commission or omission by the landlord.”

74                  There are two conclusions which follow from the cases cited, not only by Hill J, but also by Higgins J at first instance in the Hawkesbury Nominees case.  The first is that acts committed or authorised by or on behalf of the lessor may derogate from the grant even if the acts or omissions affect the quiet enjoyment of the premises only indirectly (see also Telex (Australia) Pty Ltd v Thomas Cook & Son (Australasia) Pty Ltd [1970]2 NSWR 257; Haig v Chesney [1925] SASR 82; Aldin v Latimer Clarke, Muirhead & Co [1894] 2 Ch 437; Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207; Aussie Traveller Pty Ltd v Marklea Pty Ltd [1998] 1 Qd R 1).

75                  The second is that, whilst interference with the normal use of premises arising from failure to repair will breach the covenant of quiet enjoyment (see Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15), it is no answer to a complaint of breach of the covenant that it was a result of work required by statutory or other lawful authority (see Reid House Pty Ltd v Beneke (1986) 5 ACLC 451).  Nevertheless, to be a breach of the covenant there must be a substantial inference with the tenant’s quiet enjoyment.  That is no different, in substance, from the “significant” diminution referred to in s 71 of the Act.

76                  It was open to the Tribunal to have concluded that the conduct of the respondent’s contractors, though both lawful and in pursuance of its obligation to repair and necessary to prevent what otherwise would have been a breach of its obligations to maintain the appellant’s quiet enjoyment of his premises, could amount to a breach of that covenant.  It follows that, insofar as the Tribunal and Crispin J would seem to deny or qualify that proposition, they were in error.  It is not an error that affects their ultimate conclusion.  It was not relied upon as a reason for concluding that the interference with the use and enjoyment by the appellant of the demised premises was not “significant” or “substantial”.

77                  Whether the course chosen by the respondent in fact amounted to a breach of that obligation, attracting a remedy, depends on whether the interference suffered was “substantial” or “significant”.  If it was not, irrespective of the necessity for the works and their overall beneficial purpose, there would be no breach of the obligation to be excused by reference to the duty to repair.

78                  That is a factual question as we have noted.  The Tribunal decided that, though there was interference with the appellant’s enjoyment of the premises, it was not “significantly” interfered with (s 71 of the Act) and, it ineluctably follows, that the interference was not “substantial” so as to constitute a breach of the obligation to give quiet enjoyment.  It is the same factual conclusion for each purpose.

79                  Was that conclusion open?  It is true that the gardens were rendered unusable.  That had two effects on the appellant’s use and enjoyment of his premises.  First, the ancillary use of “common” areas was substantially reduced.  Second, there were some ill-effects by reason of mud, noise, etc.  However, it does not follow that the substantial removal of an ancillary entitlement, substantially or significantly (if there be a difference), reduced the appellant’s use and enjoyment of the demised area.  Nor does it follow that the inconvenience of the construction activity, even when coupled with the temporary loss of use of the gardens, constituted a “substantial” interference.

80                  The appellate jurisdiction conferred by s 126 of the Act, does not extend to a review of findings or inferences of fact, unless it be found that there was no evidence to support those findings or inferences.

81                  In Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 (“Bond”), Mason CJ observed, at 356:

“Thus, at common law, according to the Australian authorities, want of logic is not synonymous with error of law.  So long as there is some basis for an inference – in other words, the particular inference is reasonably open – even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.”

82                  That does not imply that the Tribunal, being required to act judicially, may act arbitrarily, irrationally or unreasonably. As Deane J put it in Bond, at 367:

“... there will be a discernible breach of the duty if findings of fact upon which a decision is based are unsupported by probative material and if inferences of fact upon which such a decision is based cannot reasonably be drawn from such findings of fact.  Breach of a duty to act judicially constitutes an error of law which will vitiate the decision.”

83                  In the present case, the Tribunal’s decision turned on the characterisation of the undisputed factual situation, as revealed by the appellant’s evidence.  The terms “significantly” and “substantially” seem to have been accorded no unusual or erroneous meaning.  The Tribunal applied those terms without qualifying their application by reference to the fact that the works were both reasonable and necessary. 

84                  That approach involved a finding or inference of fact only.  It gave rise to no error of law even if we might, had we been the Tribunal, have come to a different conclusion.

85                  In our opinion, therefore, no error of law appears which vitiated the Tribunal’s decision.  It follows that his Honour was correct to dismiss the appeal.

86                  It is not necessary to consider what remedy would have been appropriate if the decision had been otherwise or if the case had been put to the Tribunal on the basis of a claim for compensation by virtue of loss of a “facility” within the meaning of s 71(1)(a)(i) of the Act.

87                  We would dismiss this appeal with costs.

I certify that the preceding eighty seven (87) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Dated:                    14 May 2002

Counsel for the appellant:                      Mr J Glissan QC with Mr A Anforth

Solicitor for the appellant:                      Welfare Rights & Legal Centre

Counsel for the respondent:                   Mr P Walker

Solicitor for the respondent:                  ACT Government Solicitor

Date of hearing:                                    20 February 2002

Date of judgment:                                 15 May 2002