High Court: tenant's distress and disappointment due to lack of backdoor are compensable

The landlord failed to provide a backdoor in a residential premises for 68 months

High Court: tenant's distress and disappointment due to lack of backdoor are compensable

The High Court has ruled that a tenant's distress and disappointment due to a prolonged absence of a backdoor was compensable.

The dispute in Young v Chief Executive Officer (Housing) [2023] HCA 31 involves a residential tenant known as Ms. Young. She is an Aboriginal woman who spoke little English and did not read English. The residential premises are located at Ltyentye Apurte, also known as Santa Teresa, an Aboriginal community approximately 85 kilometres from Alice Springs.

The landlord, a corporation sole established under the Housing Act 1982 (NT), failed to provide a back door to the premises for 68 months. The operative tenancy agreement was the standard form prescribed by the Housing Act, which requires that the agreement provide 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".

Ms. Young sought compensation for the distress and disappointment she experienced due to the insecurity caused by the absence of a back door.

The Civil and Administrative Tribunal of the Northern Territory believed that an external door is not a "security device" within the meaning of s. 49(1) of the act. Consequently, the tribunal dismissed Ms. Young's application for compensation. However, the Supreme Court of the Northern Territory overturned this decision and ordered the landlord to pay Ms. Young $10,200 in compensation.

The case took another turn when the Court of Appeal set aside the compensation order by the court below. The appeal court construed s. 122(1) of the act as importing principles of remoteness that limit the assessment of damages for breach of contract at common law. Consequently, it held that those principles excluded compensation for distress or disappointment arising from a breach of a term of a tenancy agreement other than in consequence of physical inconvenience.

In a majority decision, the High Court rejected the appeal court's interpretation. The High Court ruled that the appeal court committed an error in construing s. 122 of the act to import common law principles of remoteness. The court said that the statutory compensation under s.122 must be deemed an alternative, and likely more accessible, remedy to common law damages for breach of a tenancy agreement. As such, Ms. Young's distress and disappointment were compensable on application to the tribunal under s 122(1)(a) of the act, subject to the tribunal's consideration of the factors prescribed by s. 122(3).

The high court further ruled that the connection between the landlord's breach and the distress and disappointment suffered by Ms. Young readily satisfied the causal connection required by the term "because" in s 122(1). As a result, the court said the majority did not have to consider whether the distress and disappointment suffered by Ms. Young would have been compensable in an action for damages at common law. Ultimately, the court allowed the appeal.

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