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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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RESIDENTIAL TENANCIES (MISCELLANEOUS) AMENDMENT BILL

Committee Stage

Debate resumed.

Mr VAN HOLST PELLEKAAN: Thank you, Mr Deputy Speaker, and it is terrific to have the Aldinga Primary School here with us. That leads me then to my next point. I think we do understand each other. In the commercial context, the landlord does not have the right to automatically pass on an increase in land tax at the time that the landlord receives that increase in land tax, but at the next rent review has the right to ask for a higher rent because the landlord's costs have gone up. The commercial lessee will choose to accept or not accept that new rent and the landlord obviously needs to have reference to the competitive market out there. In this bill, then, there is a parallel—you cannot pass it on immediately on the day that you get it as a landlord but you can ask for it at the next rent review, usually on an annual basis.

What is different here, though, is that the Residential Tenancies Tribunal has the right to make a decision if they choose to, to say, 'No, look, with the higher rent that you have asked for, because as a landlord your land tax has hypothetically gone up we are saying that, in the general residential market that we are dealing with here, the rent that you are seeking is excessive and we wouldn't allow it.' So does that then put the Residential Tenancies Tribunal in a very unenviable position to have to say, 'Yes we recognise that the land tax that has been applied to you as the landlord has gone up, but we are telling you that you cannot pass it on.'

So the government has applied this land tax to the landlord, but we are telling the landlord you cannot pass it on to your lessee because compared to the rest of the market it is higher, because, compared to the rest of the market, the other landlords do not own as many properties as you, so they are not caught up in this land tax regime. It seems to me that is a really awkward position to be putting the Residential Tenancies Tribunal into while, of course, they are trying to protect the tenant, and I am sure they want to look after the landlord as well, but then they have to make a judgement on the fairness, or otherwise, of the land tax that has been applied to the landlord and whether or not that person can pass that on to the tenant.

The Hon. J.R. RAU: I understand the point. However, the situation, I think, has always been that way. This is not a new phenomenon and I think we do need to bear this mind. We can have a debate about the land tax regime, about whether it is pitched at the right entry points and whether the gradations are appropriate or not. That is a completely different debate. But whatever that situation is, I think it is important to bear in mind that the people who are multiple property owners—and are therefore subject to higher rates of land tax in respect of individual holdings because of the aggregation rules—are generally speaking, people who, whilst they may not be receiving a great deal in terms of income in respect of those properties because a lot of that income may be offset by land tax outgoings, are nevertheless in normal times in receipt of an ongoing capital gain accrual in respect of the property. I understand the point, but I think it has forever been that way and we are not, in effect, seeking to disturb the prevailing situation. But I acknowledge and understand the point.

Clause passed.

Clause 5.

Ms CHAPMAN: The practice of adding in examples to bills is not one that I personally favour, but I do note that there is a proposed inclusion of an example to identify an area of exclusion under the right to occupancy, and I assume this is because, having greatly expanded the application of this legislation and the tribunal's management of the disputes, you want some reassurance for our educational colleges, St Mark's and others presumably, whereby you want to be able to say, 'We are not capturing you.'

That is fine, but what I want to ask about is share houses for country students—if one party purchases a property, for example, to educate their children at school or at university. This is not an uncommon thing from the country. Indeed, we even have property purchases, I know I have got some in my own electorate, where people from overseas have their wife or children come to South Australia, a property is acquired for them to live and the income-earning partner, frequently the husband, flies back and forth to Hong Kong, China, England, wherever they currently live, and they reside in South Australia quite often to access our independent schools, sometimes even our public schools, because I have the best ones in my electorate.

The object of the exercise is to reside here, but sometimes to offset the cost, the family who has acquired the property enters into an arrangement with other people in the local community to rent a room, to be able to house share or spread the cost. How does that operate and are they clearly not included in this, or are we going to see these people having to sign up to residential tenancy agreements?

The Hon. J.R. RAU: I am advised that boarders and lodgers are not covered. There are boarders and lodgers, then there is a share house and a rooming house. A rooming house requires at least three people on a commercial basis. A share house is a bunch of people who live together and have a tenancy that they share, in effect.

Ms Chapman: If four students are living in a house, are they caught?

The Hon. J.R. RAU: The question is one of control. Is somebody in control of that premise? If they are, that is probably a rooming house.

Ms Chapman: So they would be caught?

The Hon. J.R. RAU: They would be caught if they are in control of it, but if it is four students who have decided, 'We are going to collectively rent this place,' it is a tenancy, it is not a rooming house.

Ms CHAPMAN: Sorry, Attorney, perhaps you have misunderstood the question. I am assuming that one family have acquired the property, so it is not a shared rental arrangement, because they would all be tenants then, presumably, of the landlord. In my example the landlord is someone from the country. To offset some of the costs they then say, 'Well, look, I am happy for my neighbour's children to stay there in the house while they finish their uni degree,' or whatever, and they enter into a financial arrangement where they pay rent to be able to have a room for the duration. Sometimes it might be short term. It might be to do a practical training course or it might be a whole university degree. I am just using that as an example.

They live there and it can be pretty flexible, as happens. Of course, there is no expectation on behalf of the owner that they have to stay there for 12 months but, if they are going to stay there, they pay that contribution. It is a pretty informal arrangement. I am presenting this as an example, because it is intended under this act that the landlord should not have extra obligations, and the tenant is not expecting to have to pay a bond or any other thing. They want to be able to say, 'That would be great. I would like to be able to stay there for six months and complete my course,' or training or whatever. 'I will pay you X.' Are they going to have to be caught up in what is a very oppressive—for that sort of situation—regime of obligation?

The Hon. J.R. RAU: I thank the honourable member for her question and it is a very good question, because I can understand the practical issue that is being raised. There are a number of things to be said about it. First of all, under section 5, subsection (1)(b) provides the act does not apply to an agreement under which a person boards or lodges with another. So, that is clearly not a situation to which the act applies.

There is the concept of the boarder or lodger which, I think, is really what you were capturing in your example. That person is not caught by this legislation. Here I am giving an impromptu and, hopefully, partially accurate legal opinion but, if you go to the interpretation section 3(1) and look to the definition there of 'rooming house', that talks about:

...residential premises in which—

(a) rooms are available, on a commercial basis—

I think that is an important element in the definition—

for residential occupation; and

(b) accommodation is available for at least three persons on a commercial basis;

Then, if there is a demarcation dispute as to whether something fits into that category or another, it is sorted out by the tribunal. My interpretation of that, having looked at those two provisions, would be that there are two critical points you can differentiate these from: firstly, there must be at least three people there, otherwise it is definitely not a rooming house; and, secondly, on a commercial basis.

I think what the honourable member was talking about was not an arrangement which was run for profit by the actual owner of the property: it was rather that they were just having costs affrayed and a contribution towards upkeep or whatever the case might be. In my book, that would be a lodger and we are not seeking to disturb that in anything we are doing.

Ms CHAPMAN: I just have a question on one other area, that is, the people who are long term—that is, more than 60 days—in a hotel. Are they caught up by this? It has only recently come to my attention that someone had actually lived in quite a pricey hotel here in Adelaide for over a year. Apparently, people do that and are quite happy to pay the nightly rate or weekly rate or whatever.

But, as you will appreciate, probably the more common case is where people undertake contracts in South Australia and, with the government's interest in securing interstate companies at such a high rate for all of their contracts, they come across here and rent hotel rooms on a weekly basis and go home for the weekend—those sorts of things. These people are sometimes in these premises for a year or two. Do they escape this obligation?

The Hon. J.R. RAU: I am advised that the Residential Tenancies Act does not apply to an agreement giving a right of occupancy in a hotel or motel. It had been considered, apparently. You will remember that I spoke yesterday of the 10-year gestation of this project. At some point during that lengthy gestation, it was considered whether to extend the application of the act to apply to agreements where a person is given accommodation in a hotel or motel for a specified period of time. The good news is that the light touch of the present government prevailed. It was never identified as being an issue from the public point of view and so that arrangement is not captured by this.

Mr VAN HOLST PELLEKAAN: That light touch of the government I think is quite appropriate because the majority of those people are acting in a commercial setting anyway with regard to providing accommodation. I would like though to ask about similar situations, just to be sure we get it on the record. How would long-term stays in caravan parks and also independent living aged-care facilities be set up? There is a whole range of those that are not always run by what you would consider to be technically aged-care organisations. Councils run them and there is a range of different combinations there.

The Hon. J.R. RAU: I am advised that the caravan park people are covered by the Residential Parks Act, which is a separate legislative arrangement. We are not interfering with that arrangement. I think there is a Retirement Villages Act. There is a separate act, anyway, that deals with the independent living arrangements. We are not seeking to intrude into that space either.

Mr VAN HOLST PELLEKAAN: So even if it was essentially a community cooperative arrangement which might own a small group of properties, which is a very common situation in small country towns, and then rent those long term, ideally for aged people for a very long time, they would not be captured by the sort of thing?

The Hon. J.R. RAU: It certainly is not the intention. Can I get a fuller answer in due course and get back to you?

Mr VAN HOLST PELLEKAAN: Yes, that would be great.

Ms CHAPMAN: In the submissions that were received—which we do not know about because, of course, they are all secret—can you tell us were there any requests for any other areas of occupancy to be taken into account in this legislation that were declined as a consequence of your assessment of the review?

The Hon. J.R. RAU: Again, I do not believe so, but I am asking my departmental people to check that. I have also been reminded to clarify that, in terms of submissions, we are seeking the permission of the contributors to make those public. I have no particular issue about that one way or the other. We have had this conversation here on numerous occasions in the past, but if people write in response to an invitation from me to make a contribution about a topic, sometimes people are very comfortable having that made public and sometimes people are not. Sometimes people perhaps express things in those submissions which they do not intend to be expressed in a broader public context, which is the reason I do not make a habit of releasing those things without the author being content with that. We will follow up the point you raised and make the inquiry.

Ms CHAPMAN: In respect of the submissions, were there any areas of accommodation or occupancy that were included in this to which there was objection? So it is the reverse.

The Hon. J.R. RAU: I am advised that we cannot tell you with absolute certainty that there were no submissions which complained about anything, but we will check that to the best of our capability. I am advised that the support, particularly for the inclusion of the rooming people, was considerable. I cannot say to you that there was not a single person who wrote in and said they did not like it. That may be the case, I am not sure; we will check it, but certainly the predominance of opinion was in favour of what we are doing.

Ms CHAPMAN: In respect of the submissions, you indicate that it is your practice to obviously respect people who make a submission and to inquire of them if they are happy for their submission to be made public. You and I both know how that works in the sense that it took two years for the District Court to get you to disclose the documents surrounding the 30-year plan and the submissions over that; so you well understand the importance of that procedure. I for one note that it is not unreasonable to ask someone if, at the time they are making a submission, they should be made available publicly or if they have any objection to that. However, in this instance, minister, you did not even ask the people at the time of calling on the submissions whether they gave a toss about whether it was public or not. You only wrote to them last week to inquire as to whether you had permission to publish their submissions.

My question is: if you cared about their submissions, if your department were completely frank about making these submissions available to the public (given that is the presentation that was offered), why did it take until last week before you even wrote to them to inquire as to whether they consented to those submissions going on the website rather than leading us all up the garden path about these being public, even post the briefings on it?

The Hon. J.R. RAU: It may be that the member for Bragg is one of those lucky people who executes all manoeuvres with perfection all the time. I am not: I am learning all the time. I think I am getting better, gradually.

Ms Chapman interjecting:

The Hon. J.R. RAU: No, last week the letters might have gone out but the history of this goes back, I think, a decade, and I have only been on the journey for the last year or so.

Ms Chapman: Don't pretend.

The CHAIR: Member for Bragg, you have asked a question. Give the minister an opportunity to respond.

The Hon. J.R. RAU: It was sort of a general question, which I am prepared to answer. My preferred position, quite frankly, is that all submissions we receive should just go up on a website and everyone could have a look at them. That would save me answering these questions all the time, and it would make it easier for the member for Bragg. I personally would prefer that.

We have adopted, in my office, a practice, which I hope is generally observed—if it is not, it is an omission on our part—saying, 'If you want to make a confidential submission, can you please indicate that on the submission, because it might be that there will be an application under the Freedom of Information Act or there will be a request for these to be put on a website. If you have got a problem about that, can you please let us know?' I think that happens generally, now, with everything we put out. I am advised that was in the discussion paper, too, that if you make a submission it may have to be FOI'd, irrespective of whether we try to respect your wishes and not hand it out just because we feel like it.

We are trying to accommodate the point you are making when we call for public submissions by saying to people, first, 'If it is confidential, you have got to let us know that is what it is,' and, secondly, 'Even if you say it is to be kept confidential, we remind you that that is not determinative of whether an FOI request in respect of this document may or may not be successful. That is a matter for the decision-maker to decide at the time.' It is my practice now that those sorts of comments are included in the material we send out to people so they are perfectly aware of what might happen.

When I first started consulting on things a couple of years ago, I was not alive to this issue, particularly, and it may be that some of the consultations that have occurred in the past have occurred where people have not received that clarification at the outset so they may or may not have turned their minds to that point originally.

Ms CHAPMAN: Under your watch, minister, the 30-year plan submissions did have it on it, so it has been operating for a number of years: it just did not operate in this one. In the letter that you signed and sent out to submission contributors six months ago, but this letter went out last week, it includes this in it:

I would like to ensure that public debate about the reforms is as well informed as possible. To this end, I would like to make your submission public and seek your permission to do so. I would therefore be grateful if you would advise the Attorney-General's Department by Friday 7 December 2012 if you do not give permission for your submission to be made public.

So, why are we debating this now, when you have clearly sent out a letter last week to people on these submissions asking them to elect—in a date a week's time away—to disclose their submissions? Why haven't you written that letter and said to them, 'Will you give this permission before we debate this matter so that we can be as well informed as possible in respect of the public debate on this bill?'

The Hon. J.R. RAU: And that question is in respect of clause what?

Ms Chapman: Five.

The CHAIR: It is a long bow, I agree, but it does talk about the application of the act.

The Hon. J.R. RAU: I do not think we are getting anywhere with this. I assure you that I cannot recall having sat down and gone through, myself personally, every one of these submissions, but I have no recollection of anyone coming to me and saying, 'Look, you need to know: the secret recipe for the 11 herbs and spices is buried inside one of these submissions. Treat it with absolute care.' I have not heard that. As far as I know, I am not hiding or concealing any great secret.

There is no matter of embarrassment to me or anyone else as far as I am aware in relation to this and, quite frankly, can I say to the member for Bragg, we are talking about residential tenancies stuff. Most of the submissions and opinions are relatively predictable in that there are advocates for people like Shelter, for example, who quite understandably have a particular perspective on these issues and make genuine, sincere contributions which are, with the greatest of respect, relatively predictable.

Then, there are other people who represent the landlord perspective who likewise make relatively predictable and, no doubt, sincerely meant contributions. I am just not sure, ultimately, what point the member for Bragg is seeking to make. The practicality is, in terms of that whole process, as I understand it, this bill is certainly not going to be through the other place any time in the next 24 hours. There will be plenty of opportunity for consideration of those things, but if there is anything in there that is even the remotest bit of a surprise to anybody, I will go he.

Ms CHAPMAN: Having got to 7 December, with the exception of any written objections to you, is it your intention that on 8 December, or as soon as practicable after the 7th, these submissions will be put on the website at last?

The Hon. J.R. RAU: If people are cool about it, then so am I. I am entirely relaxed about it. We will put it on the website or, if the member for Bragg would like, we can organise a courier to bring documents around to her office. We will do whatever you like. We will send you an email. We are into communication.

Ms Chapman interjecting:

The Hon. J.R. RAU: If you ask us.

The CHAIR: It would be cheaper just to send a link.

The Hon. J.R. RAU: We could send a link, yes. Maybe we will do that to save our forests.

Clause passed.

Clauses 6 to 8 passed.

Clause 9.

Ms CHAPMAN: This is just the extension of the jurisdiction from $10,000 to $40,000. I think I indicated in my second reading contribution that the expansion of the jurisdiction is appropriate given the lapse of time, but is there some formula upon which this has been developed, and, if so, what is it?

The Hon. J.R. RAU: As I understand it, the Law Society thinks this is a bit high. The member for Bragg mentioned this yesterday. The increase was actually requested by the tribunal, which advised that it not infrequently heard matters where the application is limited to $10,000 simply so that it may be heard by the tribunal—in other words, to ground the jurisdiction. The civil jurisdiction in the Magistrates Court is being increased to $100,000 by the courts efficiency bill, which has been assented to but not yet commenced, so the tribunal's jurisdictional limit to hear residential park disputes under the Residential Parks Act is also $40,000.

Clause passed.

Clause 10.

Ms CHAPMAN: This was a provision that a notice, in respect of an application to the tribunal, need not identify the tenant, essentially, or the occupier. Presumably, it just had 'occupier' or 'subtenant' or some generic description—that is all that is going to be required under this amendment. I suppose the concern I raise in asking this question about where this has come from is that, especially at this time of the year—I do not know about the Attorney or other members—when you get home your letterbox is full of Christmas brochures and all sorts of pamphlets and things with people wanting to sell you things. I suppose it is no more than what you get at election time if you live in a marginal seat.

In any event, our letterboxes are stuffed full of material about what we can buy people for Christmas, and all sorts of envelopes which are addressed to 'the occupier' or 'the householder' to inspire one to enter a lottery for a house in Queensland or whatever. I do not know about other members but I do a fairly brisk assessment about what is to be read and what is not and almost all of it goes straight from my letterbox to the bin. Unless it has 'Vickie Chapman' on it, it does not get opened or read.

I might be out of sync with the rest of the world but the reality is that, if there is a notice to someone of some legal proceeding, there has usually been a fairly strict set of rules to adhere to. That is, a person has to have received the notice—and sometimes that is done and delivered not by a postie even but by a process server or sheriff's officer or somebody—which very clearly has to identify the person who is going to be the subject of the tribunal hearing. I would have thought that in landlord and tenant matters, the tenants are not there by accident—you know who they are. If they are a trespasser then you call the police. However, if it is somebody who is a known tenant, then I do not understand the need for this general description and addressing it to 'the occupier' or 'tenant'.

It just seems to me to fall very short of what we would normally expect in any legal action, especially when this could be a very significant impost on the recipient—either the tenant, who is being demanded to attend a tribunal for review of their bond or something or, indeed, for a landlord who might have missed out on a notice that they are going to have a shed built onto their house. It just seems to me that this is a very slack introduction to the requirements and, if it is not, I am sure you will enlighten me.

The Hon. J.R. RAU: Yes. I understand, as a legal practitioner, the point that the honourable member is making. However, I am advised that the practicalities of tenancies often involve a situation where—if I can put the converse before the parliament—the member for Bragg may have been the person who took out the residential tenancy in the first place; the member for Bragg then, for whatever reason, moves on but other people with whom the member for Bragg was sharing the tenancy have decided they are quite happy to stay there and they continue to pay the rent and they continue outwardly to observe the conditions of the tenancy, but they do so unbeknown, in particular necessarily, to the landlord.

If we were then to say, 'Before any action can be taken in respect of that tenancy'—which is subsisting basically in the absence of knowledge by the landlord really about the whereabouts of the actual person with whom they have made an agreement—then the landlord might be put in the position where they have to identify who these people are in there before they can validly serve anything on those people in order to execute any process under the Residential Tenancies Act.

That would be a bizarre outcome, because if they were trying to actually get them out and they had to find out who they were before they could serve a summons on them to get them out, but the people refused to tell them who they were, then they would never get them out. So, this is an attempt to basically ensure that whoever is the occupant has drawn to their attention the fact of a proceeding before the tribunal being imminent. I think we would be actually disadvantaging landlords in the case of where they have had some of these itinerant people moving in and out. There could be one or two turnovers of occupants in the place unbeknown to the landlord because, at least for a period, they might be observing all of the obvious requirements of the tenancy.

Ms CHAPMAN: In any event, it still seems to me an unsafe practice to expect that notice will be accepted on the basis that a general occupier notice is given. In any event, what frequently occurs is if the current tenant is no longer there, the letter is returned unopened. It is not unreasonable then for the landlord, in the example that you used, to advise the tribunal of that and be able to seek to dispense with the usual notice and requirements. Why would that not occur as in any other jurisdiction?

The Hon. J.R. RAU: I think all I can say is I do not believe the tribunal has any difficulty about this issue, and it is trying to make sure everyone does get a notice. Let's remember, too, this is a pretty informal tribunal; we are not talking here about the Supreme Court or something.

Ms Chapman: Who asked for it?

The Hon. J.R. RAU: Originally, this was raised by the tribunal, I am advised.

Clause passed.

Clause 11 passed.

Clause 12.

Ms CHAPMAN: This has got an inclusion of a provision in respect of evidence not being available to be used in criminal proceedings or for perjury. Is this some new initiative because there is nothing covered in the act currently for this, and who sought that this be included?

The Hon. J.R. RAU: I am advised that this was something that was requested by the tribunal because they thought it would facilitate them obtaining information from people rather than having people just come up and refuse to answer on the basis of potential consequences in answering the tribunal's queries. It is at their request to facilitate them doing their job, as I understand it.

Ms CHAPMAN: Is it proposed that there is going to be some notice given to people appearing before the tribunal that this clause now applies and that they can fess up to whatever the issue was, if they were running a brothel in the tenancy or something, that was contrary to the terms of their tenancy agreement but might have been in breach of the law? How is this going to be conveyed to the parties who appear before the tribunal?

The Hon. J.R. RAU: I assume that that will be a matter that the tribunal will inform persons of in the course of their involvement with the tribunal. I would also assume that the cases in which this type of issue might be significant will be very evident to the person in the tribunal because they will ask a question and the person will say, 'I don't want to answer that,' and then they will say, 'Is that because you believe that you might be in some way incriminated by answering that question?' The person would then reply, 'Yes, I am not going to answer it for that reason,' and then they could say, 'Can I draw your attention to'—that is not a problem. I assume that is the way it will unfold. I do not believe there is likely to be some general loud and specific broadcasting of this particular provision. I think it is something that will be utilised as and when it is useful.

Clause passed.

Clause 13.

Ms CHAPMAN: I would have to go back and have a look at the act, minister, but I thought the tribunal procedures were such that it was a fairly informal process anyway. The only thing that seems to be new here, and you can correct me if I am wrong, is that they can now deal with an application on the documents and if the parties do not turn up it could be disposed of. I assume that is a request that was put by the tribunal for ease of progressing things in their case load, so that if they are satisfied there is enough information on the documents they will make the order for return of the bond, or eviction, or whatever is before them. Has this been at the request of the tribunal, that they have this power?

The Hon. J.R. RAU: I have to own up to the member for Bragg, I think this was my idea, but I think the tribunal like it, and CBS like it. It did occur to me that there are many circumstances in which if a matter is so transparently straightforward or simple that it could be dealt with administratively, and the parties did not object to it, then why should that not occur so as to minimise the red tape and provide a fairly simple way forward? I think it needs to be borne in mind that any decision of the tribunal can be the subject of a review.

So, any anxiety the member for Bragg might have about matters being dealt with in this way and causing a problem, they are reviewable. This was intended to be a measure which would enable simple matters, transparent matters, obvious matters, to be dealt with in circumstances where the parties were obviously happy to do so on the papers. If the parties do not want that to happen then that is entirely reasonable and it would not occur this way.

Ms CHAPMAN: I am not sure, perhaps I do not have it in the bill I am reading, but there does not seem to be any requirement that this is under consent orders, which would be logical; that is, someone puts in an application for return of a bond and there is a document, affidavit, certified declaration, or something from the landlord that says that they have inspected the property and they are happy for the money to be returned and they would sign off. That would be apparent from the documents that everyone is agreed and it is just enforcing a consent order.

But this, it seems to me, is suggesting that there is no obligation for consent. This is, in fact, not that situation. It is suggesting that it is apparent on the documents that there is some basis upon which, we do not know what, they should be able to deal with it on the documents. If in fact there were documents claiming that there was some agreement, there had not been a sign-off on it but the tribunal presiding officer picked it up and said, 'Yes, this looks like this is what the landlord says, that everything is fine,' and in fact it is not the case, that one of the parties had intended to be there but could not get a bus or the bus was late or does not turn up at all, which is more common these days, and could not get to the hearing.

This is your brain child, this is your thought bubble, can you explain to us, apart from minimising red tape, under what circumstances would you be saying to a tribunal hearing, 'I'm going to give you the power to just deal with the documents if these people don't turn up'?

The Hon. J.R. RAU: That is the last time I am going to own up to having had a thought.

The CHAIR: I think, minister, you need to report progress.

The Hon. J.R. RAU: Let us have some progress, please.

Progress reported; committee to sit again.


[Sitting suspended from 13:00 to 14:00]


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