Compensation claims by the tenant
A tenant may claim compensation from a landlord if:
- the tenant has suffered loss or damage as a result of a breach of duty under the RT A written law made by parliament. Also called an ‘Act of parliament’, ‘statute’ or legislation. or a The agreement between a landlord and a tenant for the rental of a property. agreement by the landlord; or
- the tenant has paid more to the landlord than required under the tenancy agreement or RT Act (ss 209, 210).
The RT Act distinguishes between compensation claims based on breaches of a ‘duty provision’ and claims based on other breaches.
Where the tenancy remains in effect, a tenant must usually serve a Breach of Duty Notice on a landlord before claiming compensation for a breach of duty. If the tenancy has terminated, a tenant does not need to serve a Breach of Duty Notice before applying for compensation. An application (under ss 209, 210) may be made immediately to VCAT.
A compensation claim should include Material presented to a court to prove or disprove a fact. It can include what witnesses say as well as documents and other objects. of the breach and loss, the first communication of the issue to the landlord, the number of days the issue persisted for, and when or if the issue was rectified. Parties should identify each issue and the loss they suffered as a percentage of their daily rent.
Additional and discrete losses may also be claimed. For example, an electrical fault is reported to a landlord and the landlord fails to attend. Two weeks later, the electricity shorts out and cannot be restored without intervention. The landlord does not arrange repairs until seven days later, when an electrician arrives and restores power. All the food has been spoiled and the family has been unable to use much of the premises. The tenant may claim for loss of quiet enjoyment of the premises due to no electricity for seven days. If the daily rent is $50 and the tenant believes the loss is 50 per cent, then the sum claimed is $175, plus loss of food and other reasonable expenses for which the tenant should provide receipts.
Ultimately, VCAT may reduce any claim. Generally, VCAT A document that sets out what a person wants to happen to their money and other property after they die. not increase the amount claimed for a tenant. Therefore, parties should be reasonable, and err on the side of making a larger claim, but expect that they will likely be reduced to a more reasonable amount.
Parties should also pay particular attention to factors outlines in section 211 of the RT Act regarding what VCAT considers when determining fault and amounts of compensation payable. Section 211 allows VCAT to consider a wide range of factors including the parties’ conduct and reasonable offers, actions and inactions leading up to the point of VCAT’s A finalisation, especially a decision made by a court or tribunal to finalise (determine) a case. .
The authority of a court or tribunal to hear matters brought before it, based on some factor such as area or law, amount of money claimed, or geographic area.
VCAT has jurisdiction to hear claims of up to $10 000, or a higher amount if the parties agree. RT Act listed matters cannot hear claims for compensation for death, personal injury, or pain and suffering (s 447).
In the Supreme An independent body that hears legal claims brought by parties and decides between them. Serious cases are heard by a judge and jury, or just a judge. Less-serious cases are heard by a magistrate. decision of Meringnage v Interstate Enterprises Pty Ltd  VSCA 30 (25 February 2020), the court confirmed that VCAT does not have jurisdiction to determine matters where one A person or organisation directly involved in a court case. Parties include the plaintiff or applicant, the defendant, and any third party added to the action, but not independent witnesses. lives in another state. This does not apply to companies, territories, or parties who live overseas. People affected by this issue should seek legal advice (see also s 510 RT Act).
The cost of a basic VCAT application is $61.50; this fee is indexed annually. Under the VCAT Act (s 132), parties may be eligible for fee waivers. Parties are presumed to bear their own The amount charged by a lawyer for legal work. Lawyers can only charge the amount agreed with the client in a costs agreement or the amount stated by a court in its rules. The party who loses a case usually has to pay all their own costs plus most of the costs reasonably incurred by the other side. See also indemnity costs. of proceedings (s 109). However, if parties’ conduct causes delay or procedural disadvantage to other parties, VCAT has Power to choose whether to do something or not. For example, a judge may have discretion to allow a party extra time to complete a document if it would be unfair to enforce the legal time limit. to (1) A standard set of working conditions, including pay rates, for a particular industry. (2) A court decision that a party receive compensation, such as an award of damages to compensate them for physical injuries. costs.
Costs may be awarded against a party, where an The first step in agreeing to make a legally binding agreement. An offer must be accepted before there can be a legally enforceable contract. For example, a person can offer to sell their car for $5000 and a buyer can accept the offer and pay that purchase price. has been rejected and the subsequent VCAT decision is less favourable than the offer made. Rejected offers that may give rise to such costs must comply with sections 113 and 114 of the VCAT Act.
If a party is successful (or has substantially succeeded) in their application, the unsuccessful party may be directed to reimburse the successful party their application fee. An applicant should include in their application a request to have their application fee reimbursed. This is at the discretion of VCAT (s 115A–D VCAT Act). Refer to the VCAT fee Extra information accompanying an Act of parliament or a contract, such as tables, lists or forms. and the fee waiver grounds on VCAT’s website (www.vcat.vic.gov.au).
Australian Consumer Law
Parties may concurrently invoke the Australian Under the Australian Consumer Law, a person who buys goods or services for less than $40 000 or for personal or home use. Law and Fair Trading Act 2012 (Vic) (‘ACL&FTA’). This can be done by referring to section 184 of the ACL&FTA and 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). Contact Tenants Victoria for advice (see ‘Contacts’ at the end of this chapter).
Under the ACL&FTA, VCAT may also consider the Australian Consumer Law (ACL), which is 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 An agreement that the law will enforce. terms’ (ss 23–28 ACL; s 185 ACL&FTA);
- ‘bait advertising’ (s 35 ACL);
- guarantees as to ‘fitness for purpose’ (s 61 ACL);
- 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 of this book.
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, it is 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’s Find a Lawyer Legal Referral Formal delivery of legal documents to a person to tell them there are court proceedings against them which they must defend, or to make sure a witness in a case knows when they have to go to court to give evidence. (see Chapter 2.1: Legal representation).
Limitation of action period
Claims under contract can be made at any time up to six years after the Claimed but not proved. For example, the police can allege in court that a car was stolen, but they then have to prove it with evidence. If you say a person did something illegal you are making an allegation. Unless you can back it up, you will not be able to win a court case about it. loss or damage has occurred. After such time, an application may be A law made by parliament, either state or Commonwealth. Also called an Act, and Act of parliament or legislation. 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 advisable to take action as soon as practicable or pay careful attention to limitation dates.
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 More likely than not. The plaintiff in a civil case (a non-criminal case) must prove that what they are arguing is more likely to be true than false. This is called the standard of proof. See also beyond reasonable doubt. that:
- the landlord breached the tenancy agreement or the RT Act; 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 A person who acts for someone else. They can make decisions, carry out tasks or make agreements for the other person. For example, if you ask someone to bid for you at an auction they will be acting as your agent. has committed certain breaches of the RT Act 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’ above. This notice must:
- specify the breach;
- detail the loss/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).
If the landlord or agent has breached the RT Act 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 8.10(2) VCAT Rules).
Compensation claims by the landlord
A landlord may claim compensation from a tenant if:
- the landlord has suffered loss or damage as a result of a breach of duty under the RT Act or a breach of the A document that sets out an agreement between a landlord and a tenant for the renting out of property, or for the use of other personal property such as a car. by the tenant; or
- the landlord has paid more to the tenant than required under the lease or RT Act (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 lease or the RT Act;
- they have sustained loss or damage;
- the loss or damage resulted from the tenant’s breach of the lease or the RT Act; and
- the amount they are claiming is reasonable.
The landlord must provide evidence to support their claim and must give the tenant copies of any documents or photos they present to VCAT.
It is prudent for parties to ask for in writing any document they wish to see prior to the The time and place at which a court or tribunal hears the parties argue their case and makes a decision.. 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 How believable a witness is in court when they claim to be telling the truth. See also independent witness; interested witness..
According to VCAT Rule 8.10(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 RT Act 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 a 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 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 generally allows 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.