My update will concern landlord liability and the aftermath of Northern Sandblasting Pty Ltd -v-Harris.

Northern Sandblasting Pty Ltd -v-Harris

Although the High Court decision resulted in a 4/3 majority judgment in favour of the Appellant Plaintiff recovering against the landlord, the identification of principle arising from the case has been the subject of much conjecture.

You will recall that the majority Brennan CJ, Toohey, Gaudron and McHugh JJ constituted the majority dismissing the landlord’s appeal from the Queensland Court of Appeal. Justices Toohey and McHugh held that the landlord owed a non-delegable duty of care to <ensure that reasonable care was taken by the electrician in repairing the stove. On their reasoning, the landlord was therefore liable per se as a result·ofthe electrician’s negligence which was not in dispute. Justices Brennan and Gaudron held that there was no non-delegable duty. There was however a duty at the commencement of the tenancy to ensure that the premises were free of defects which were discoverable by reasonable inspection.

Some Judges in the majority agreed in part with those in the minority. Some dissenting Judges agreed with the majority Judges but took different views of the evidence. Since then there has been some confusion as to exactly what law results from the case.

This is what I think is the principle arising from NOlthern Sandblasting:

• There is no non-delegable duty owed by a landlord to a tenant whereby the landlord will be responsible for the negligence of others in effecting repairs.
• There is no independent duty to carry out an inspection of the premises prior to a tenant’s occupation.
• There is a common law duty to take reasonable care.
• Breach of statutory obligations such as those contained in the Property Law Act and Residential Tenancies Act are not actionable by third parties. (Also, an obligation to keep premises reasonably fit for habitation does not require a landlord to keep them free of all defects.)
• There is a distinction between the duty owed at the commencement of the lease and that which applies during a lease.

There are three Appeal Court cases which I have been able to find which have followed Northern Sandblasting which I hope will assist to prove this theory.

Austin -v-Bonney

The first of these is Austin -v-Bonney (Qld Court of Appeal, Appeal No 60 of 1995, delivered 12 February 1998).

In this case, the tenant Austin suffered an injury when he fell down an internal staircase of a Mackay flat causing an injury to his left hand and lower back. He had occupied the flat for a year before the injury but the Defendant had only owned the premises for a period of five weeks when the injury occurred. The finding in the Court that the steps were defective and dangerous on the day of the fall (defective treads and no handrail) was not challenged on appeal.

This, unlike Northern Sandblasting, is not a ‘duty at commencement’ case.

The Plaintiff failed at first instance with the Learned Trial Judge concluding that the Defendant landlord had not received any notice of the defects.

The claim was made in contract and tort and failed on both counts because of the absence of notice by the tenant to the landlord of the need for repairs.

The tenant appealed on tort aspect of the claim only.

The majority (Thomas J and Helman J) concluded on the basis that, on the facts, there had not been sufficient notice given to the landlord of any defects.

His Honour Justice Helman considered that it was simply impossible to determine from the evidence when the notice of the defect was given and accordingly the Plaintiff failed to satisfy the necessary criteria both in tort and in the contract that the landlord failed to carry out the necessary works with reasonable expedition.

He examined the provisions of the Residential Tenancies Act 1975 which then prevailed and pointed out that Section 7(a)(ii) implied an obligation on the part of the landlord to provide at the outset and during the tenancy to maintain, the dwelling house in good tenantable repair and in a condition fit for human habitation.

His Honour Mr Justice Thomas was also of the view that there was insufficient evidence to establish when the notice of the defect was given to the landlord’s agent and whether there was reasonable time from that event to the date of injury to enable the landlord to effect repairs.

His Honour specifically concluded that although notice to an agent was effective as notice to the landlord, knowledge of the contents of the notice should only be imputed to the landlord at the time when it was or ought to have been received by the landlord:

It seems to me that where notice is dependent upon an agent’s duty to communicate information to a principal, there must be taken into account a reasonable time for such communication.

He was also of the view that the type of repairs that needed to be done, although not substantial, would have taken at least a week, if not a fortnight to put into place.

The points to note from this case are:-

• A tenant’s claim arising during the currency of a lease must be framed as a breach of duty to maintain case.
• The circumstances giving rise to a breach of duty to maintain either in contract or in tort require notice being given to the landlord and failure on the part of the landlord to carry out the necessary works within a reasonable time.
• Scope for possible breach of contract argument on a different basis where the landlord fails to “provide” premises at the outset in good and tenantable repair -Helman J.
• Northern Sandblasting interpreted as “reasonable duty of care” case only.

Assaf -v-Kostrevski

The next case is that of Assaf -v-Kostrevski (NSW Court of Appeal delivered 30 September 1998, CA40404/96). The Plaintiffs who were occupants but not tenants, suffered an electric shock when using a makeshift laundry light consisting of a portable light lead bulb which was in turn connected to an extension lead.

The premises were dilapidated. The laundry at the back of the house also contained a toilet cubicle. The toilet had no light of its own. The ceiling light fitting in the laundry was defective and couldn’t be used. The laundry floor was usually wet with puddles of water coming from the overflowing toilet because of blocked drainage as well as an open window when it was raining (as it had been on the day in question).

The conditions were so bad that apart from moonlight when available, the occupants needed a candle to see in the laundry and toilet. When they complained to the agent he told them “The owner won’t fix a thing ….. He is not willing to spend a cent, you live as it is.”

Special Condition 33 of the written Lease Agreement provided that the tenant acknowledged letting the premises in a dilapidated condition.

The Plaintiffs sued the Real Estate Agent and owner. The case against the agent was on the basis that they had complained about the defective laundry light as a result of which the agent had inspected the premises and suggested that they use an extension lead arrangement. This was the type of device they ended up actually using and which caused the electric shock as a result.

The accident occurred within days of the tenant taking up occupancy. Hence the appeal dealt with the duties at inception, it was not a case concerning the landlord’s control of the premises. It was also a third-party case.

The trial at first instance was decided to apply Cavalier -v-Pope. The decision was handed down prior to the High Court’s ruling in Northern Sandblasting. The claims against the agent and the landlord were both dismissed.

The Plaintiff successfully appealed with respect to the landlord’s liability but the judgment in favour of the agent was affirmed.

Mason, President articulated the ratio of the Northern Sandblasting case as establishing a duty of care on the owners to:

make the premises as safe for the purpose as reasonable care and skill on the part of the occupier can make them.

His view and that of the two concurring justices was that there was nothing more than the common law duty of reasonableness.

As to whether or not the landlord’s duty was the higher “non-delegable” duty was not required to be decided as in the instant case the defect existed from the inception of the Lease and it was one of which the landlord was aware. Accordingly, the case could be distinguished from Northern Sandblasting on this basis.

The application of the duty of care and the finding of the breach is worth examining in this case.

It was agreed that the faulty extension cord and light were something that the tenant or Plaintiffs had supplied and erected and that the wet floor in no way contributed to the accident and the defective extension cord was the immediate cause of the accident. Nevertheless, Mason, President, considered:-

Having placed the safety of the premises in the tenant’s inexperienced hands the owners can scarcely be heard to say (at least at this stage of the proceedings) that the injury by electric shock of the guests using the wet laundry/toilet was not a “real risk”, one which would occur to the mind of reasonable persons in the Defendant’s position and which they would not brush aside as far fetched.

His Honour went on to state that it was not necessary that this particular accident and the particular damage were probable but merely sufficient that the accident is of a class that might well be anticipated as one of the reasonable and probable results of the wrongful act. Important points from-this case are:-

Agent not liable because he was not an electrician and didn’t represent himself as being one or an expert.

Landlord’s duty to make the premises as safe for the purpose as reasonable care and skill on the part of the occupier can make them.

Causation.

NSW -v-Watton

The next case in New South Wales -v-Watton (NSW Court of Appeal 7 December 1998, CA4043 0/98).

This was a landlord’s appeal against a tenant’s claim arising out of a Residential Lease. The Plaintiff was a policeman occupying a State Government residence in country New South Wales. The premises had previously been tenanted by another police officer. ill between the departure of the previous tenant and the commencement of the Plaintiff s occupation, a properties officer from the Goulburn Police Academy carried out an inspection of the premises and completed an inspection report recording that all lights and power points were undamaged and in working condition.

In December 1994 the Plaintiff suffered an electric shock while reattaching a metal bracket supporting a curtain rail to a gyprock wall. He was dazed and partially paralysed and had significant ongoing disabilities.

It was found that:-

• The wiring was defective.
• It was not known who installed the faulty wiring.
• The wiring system could have been tested for leakage which would have detected the fault and as an extra precaution, a Residual Current Detector could have been installed.
• A diligent pre-Lease inspection ought to have revealed the electrical installation as suspect: There had been a socket on the floor of the lounge room attached to an extension cord which disappeared behind a skirting board. The inspection report made no reference to it.

The Learned Trial Judge, relying on Northern Sandblasting, asserted that there was a duty to inspect the premises and that the inspection, in this case, had been carried out negligently and the breach of duty resulted in the plaintiff’s injury. Judgment was entered for the Plaintiff.

The State of New South Wales appealed.

It was held by the Court that there was no independent duty upon the landlord to inspect premises but rather, the duty is to make leased premises as safe for the purpose as reasonable care and skill on the part of the landlord can make them. (Assaf’s case followed).

In the instant case, it was clear that an inspection was carried out and carried out negligently and accordingly, the appeal should be dismissed.

It was also noted by Fitzgerald AlA that the duty contained in the NSW Residential Tenancies Act to have a condition report completed prior to the commencement of occupation by a tenant was,

necessarily a requirement that residential premises be inspected with reasonable care prior to letting to a new tenant. Breach of that obligation is evidence of negligence.

The important points from this case are:-

• Northern Sandblasting does not establish that there is an independent duty on a landlord to inspect premises.
• Common law duties of reasonable care apply.
• The statutory duty to complete a condition report requires a diligent inspection to be carried out – Fitzgerald AlA.

Similar provisions to the NSW legislation are in Queensland contained in Section 42 of the Residential Tenancies Act 1994 which came into effect on 3 April 1995. This section provides as follows:-

Condition report at start of the tenancy

(2) The lessor must

(a) prepare, in the approved form, a condition report for the premises and any inclusions; and

(b) sign the report; and

(c) give 2 copies of the report to the tenant as required by this section. Maximum penalty-20 penalty units.

The prescribed form is Form lA which, incidentally, covers power points and light fittings.

Conclusion

We should now return to the principles I flagged at the outset, what I put up as the resulting principles from the High Court in Northern Sandblasting. I will now attempt to justify them.

There is no non-delegable duty owed by a landlord to a tenant whereby the landlord will be responsible for the negligence of others in effecting repairs.

– follows from High Court judgement itself Only Toohey and McHugh JJ in favour. Brennan CJ, Gaudron, Dawson and Kirby JJ specifically ruling to the contrary.

There is no independent duty to carry out an inspection of the premises prior to a tenant’s occupation.

• follows from NSW v Watton.

There is a common law duty to take reasonable care.

• follows from High Court judgement impliedly from all justices, with the possible exception of Too hey and McHugh JJ who found for the higher non-delegable duty.
• Expressed in Assaf and Watton as a duty to make the premises as safe for the purpose as reasonable care and skill on the part of the occupier can make them.

Breach of statutory obligations such as those contained in the Property Law Act and Residential Tenancies Act are actionable in contract and tort but not by third parties. (Also, an obligation to keep premises reasonably fit for habitation does not require a landlord to keep them free of all defects.)

• follows from High Court judgement -Gummow I with whom Brennan Cl, Toohey and Gaudron IJ agreed.
• Austin v Bonney

There is a distinction between the duty owed at the commencement of the lease and that which applies during a lease.

• with a defect at commencement case, turns on whether an inspection occurred or ought reasonably to have occurred and if so then, whether the landlord or his agent ought to have been thereby alerted to the defect Northern Sandblasting, Assaf, Watton.
• with a defect during tenancy case, depends on lessor receiving notice of the defect and failing to rectifY within a reasonable time -Austin v Bonney.

Subject to any views from my learned colleagues in the audience, I believe this is a reasonable approximation of the state of the law on this subject.

It remains to consider the current residential tenancy provisions that apply in Queensland against this background.

With such provisions, come the civil liability and the second gateway, ie in the contract for a damages claim. These are the provisions which practitioners need to consider.

Lessor’s obligations generally

(2) At the start of the tenancy, the lessor must ensure-

(a) the premises and inclusions are clean, and

(b) the premises are fit for the tenant to live in, and

(a) the premises and inclusions are in good repair, and

(b) the lessor is not in breach of a law dealing with issues about the health or safety of persons using or entering the premises.

(3) While the tenancy continues, the lessor-

(a) must maintain the premises in a way that the premises remain fit for the tenant to live in, and

(b) must maintain the premises and inclusions in good repair; and

(c) must ensure any law dealing with issues about the health or safety of persons using or entering the premises is complied with; and

(d) if the premises include a common area-must keep the area clean.

Supply of locks and keys

120. The lessor must-

(a) supply and maintain the locks that are necessary to ensure the premises are reasonably secure, and

(b) give a key for each lock to the tenant.

We should [mally consider the facts of Northern Sandblasting as against the above conclusions.

The result would be that on the authority of the case itself, the plaintiff would now fail if it were to be tried again.