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Edgeworth, Brendan --- "Access to Justice in Courts and Tribunals: Residential Tenancies in New South Wales (1971-2001)" [2006] AltLawJl 19; (2006) 31(2) Alternative Law Journal 75

  • ACCESS TO JUSTICE IN COURTS AND TRIBUNALS: Residential Tenancies in New South Wales
  • ACCESS TO JUSTICE IN
    COURTS AND TRIBUNALS
    Residential Tenancies in New South Wales
    (1971–2001)

    BRENDAN EDGEWORTH[*]

    Some years ago in the Alternative Law Journal, James Taylor offered an important critical perspective on the operation of the Residential Tenancies Tribunal.[1] The Tribunal, now incorporated into an enlarged Consumer, Trader and Tenancies Tribunal, has almost complete jurisdiction over residential tenancy disputes in New South Wales. Similar models exist in most Australian jurisdictions. Taylor identified three particular problems that beset the Tribunal in relation to the rights of tenants. First, the informality operates to disadvantage tenants because landlords, commonly being repeat players, work the Tribunal and its procedures to their advantage; tenants, by contrast, usually appear in the Tribunal once only, and having no such experience, are in a weaker position. Second, the generally restricted right to representation is unfair because landlords are allowed to be represented by real estate agents. Third, community education about the Act and the Tribunal is inadequate.

    This article offers an updated and more detailed empirical examination of the Tribunal, not so much by reference to general principles of procedural justice as Taylor’s article did, but by comparison with the historical antecedent of the present regime. I am referring here to the Local Courts, where residential tenancy matters were almost exclusively heard before 1989. My research has examined residential tenancy disputes before the Court since 1971, and compared the results with disputes before the Tribunal. The data generally suggests that the Tribunal represents a significant success story in terms of access to justice.

    Relevant legal regimes

    Three separate legal regimes have governed residential tenancy law since 1971. First, the Landlord and Tenant Act 1899 (NSW) predominated until 1989. The general pattern of this Act allowed essentially a laissez-faire framework, with market forces heavily determining rent levels and the duration of leases. By contrast, the Landlord and Tenant (Amendment) Act 1948 (NSW) introduced a highly interventionist scheme to advance tenants’ rights. The legislation had two prongs: first, tenants were given security of tenure so that landlords could only terminate leases in the event that the tenant had breached terms of the lease, or in other exceptional cases.[2] Second, these ‘protected tenants’ were given a right to a ‘fair rent’ which was determined by their ability to pay. From 1954 onwards, legislation was introduced to progressively pare back the numbers of these tenancies, so that very few remain in New South Wales today.[3]

    Finally, in 1989 the Residential Tenancies Act 1987 (NSW) came into operation. It advanced three basic policies. First, it tightened the obligations of landlords for the standards of the premises. Stringent requirements were imposed for essential services, repairs and privacy.[4] Second, it shunned the key protective principles of the 1948 Act, and embraced a predominantly freedom of contract regime for two of the central features of the lease — rent and duration of term.[5] Third, and most importantly for this article, it removed tenancy disputes from the court system, conferring almost exclusive jurisdiction on the Residential Tenancy Tribunal, which was ultimately replaced by the Consumer, Trader and Tenancy Tribunal in 2001.[6] The key features of the Tribunal are that it is not bound by the rules of evidence, can set its own procedures, and that parties have the carriage of their own case without the assistance of lawyers unless the Tribunal allows legal representation. This legal framework forms the backdrop of the ‘landscape of disputes’[7] for tenancies in the Waverley local area.

    Methodology

    My research involved examining the court files in the census years 1971, 1976, 1981 and 1986, for residential tenancy disputes heard at Waverley Local Court. The Court had almost exclusive jurisdiction for disputes arising in the eastern suburbs of Sydney until 1989. These findings were then compared with the Tribunal statistics for the later census years of 1991, 1996 and 2001 to offer a longitudinal analysis of how the disputes landscape has changed over time. The census years were chosen to use Australian Bureau of Statistics (ABS) data to identify the possible influence of exogenous factors, such as shifts in the total number of tenancies in the area.

    All residential tenancy matters appearing before both Waverley Court and the Tribunal were scrutinised by reference to the following questions:

    • How many disputes reached the court/tribunal in that year?

    • What was the proportion of landlords to tenants in accessing the court/tribunal?

    • What was the range of matters considered by the court/tribunal?

    • What were the relevant success rates for landlords/tenants?

    Answers to these questions reveal a clear picture of dramatic change in the disputes landscape under the two regimes in terms of total numbers of matters, the range of matters heard, and the balance of landlord to tenant applications.

    Tenancies in Waverley local area — distinctive features

    As ABS data indicate, while the general rental profile of Waverley local area in some respects deviates from the State norm, overall it is not significantly different from the general position across the State of New South Wales as a whole. Perhaps surprisingly, the total number of tenancies in the Waverley local area has dropped slightly over the period, while other tenure categories have increased. So, although there has been about a 7 per cent increase overall in households in the area over the 30-year period, there has been a drop of approximately 14 per cent in the category of tenanted households (from 38,806 to 33,450).

    These figures should be contrasted with the figures for the State of New South Wales generally, where a steady increase in all tenure types is evident, consistent with a general population increase across the State over this time. In one respect the profile of tenanted households is markedly at odds with the State mean: the rate of tenanted property is significantly higher than the mean across the State. However, the difference is diminishing over time, dropping from almost twice the level of tenancies across the State in 1971 to close to 50 per cent more by the year 2001. Importantly, this difference has no bearing on the comparative position of dispute resolution under the Court and Tribunal over the period examined, so the local figures are clearly of relevance for the State generally.

    Local Court v Tenancy Tribunal: findings

    Number of disputes

    The most striking finding in this study is the dramatic increase in matters resolved under the two regimes. The totals for the Court are: 1971: 494 cases; 1976: 224 cases; 1981: 308 cases; and 1986: 656 cases giving a mean figure of 420. Over the period, tenancies under both the former legal regimes (the 1899 Act and the 1948 Act) were heard by the Court. As protected tenancies start to disappear in great numbers from 1968 onward, the proportion of these cases appearing before the courts begins to fall. So in 1971, there were 285 out of 494 of these cases before Waverley Court. In five years this figure dropped to 52.

    By 1981 there was no protected tenancy matter heard by Waverley Court, and none again in 1986. When we turn to the Tribunal, a very different story emerges. In 1991, the number of applications to the Tribunal in the area had already jumped to 1425 from the figure of 656 in 1986 before the Court. By 1996 this figure had leapt to 1849, reaching 2478 by 2001.[8] These increases are particularly noteworthy given that overall, the number of tenanted households in the area decreased by 14 per cent over this time as noted above. Table 1 demonstrates the extent of change by comparing the ratio of disputes to tenancies in the area. Disputes rose from 1:73.6 tenancies in 1971 to 1:142 in 1976, to a record low of 1:12.2 in 2001.

    Table 1

    Ratio of disputes to private tenants — Waverley local court area 1971–2001

    The annual mean of 420 matters before the Court between 1971 and 1986 can be seen to have increased almost sixfold to 2476 in 2001. This explosion of disputes can only be explained by the introduction of the new forum and the growing willingness of parties to make use of it.

    Proportions of landlords/tenants as applicants

    Waverley Court files for 1971–1986 reveal that the Court operated exclusively as a mechanism for landlords to repossess tenanted premises. In every year (1971, 1976, 1981, 1986) the only matter the Court was ever asked to consider was recovery of possession by landlords. In close to 1700 matters over those years, on not one occasion did a tenant ever appear as applicant. In stark contrast, in the Tribunal tenants increasingly feature as applicants. In 1991, 410 out of 1425 (or 29 per cent of the total) of complaints were brought to the Tribunal by tenants. This number and percentage dropped slightly to 370 of 1849 (or 20 per cent) in 1996, climbing back up to 689 out of 2478 (28 per cent) in 2001.

    The further significance of these numbers lies in the contrast with the total matters appearing before Waverley Court, where the mean total was 420. Over 60 per cent more tenant–applicant matters were recorded in 2001 than the mean total number of landlord–applicant matters heard by the Court between 1971 and 1989. Importantly, however, tenants were more frequently on the receiving end of applications by landlords under the Tribunal than before the Court. The mean of 420 actions initiated by landlords before the Court was dwarfed by those before the Tribunal, with 1082 applications in total by landlords in 1991, 1563 in 1996 and 1722 in 2001. It follows that the Tribunal has greatly assisted landlord access to justice as well.

    Range of matters considered

    Although the question of repossession was the sole issue before the Local Court, the Tribunal, by contrast, deals with a wide range of matters. In an echo of the former regime, the most common application to the Tribunal was from landlords for termination orders. But importantly, this was counterbalanced significantly by other, non-termination applications. In 1991, for example, 887 out of 1425 (or 65 per cent) of all applications were for termination, leaving 538 (35 per cent) for other matters. Corresponding figures for 1996 were 1146 of 1849 (62 per cent) termination applications, against 703 other applications (38 per cent), while for 2001 they were 1306 out of 2478 termination applications (53 per cent), against 1172 other (47 per cent). ‘Other applications’ includes rental bond disputes, breaches, excessive rent applications, and applications to re-hear matters.

    These figures suggest that the obligations of both parties are coming under much closer scrutiny by the Tribunal than was ever the case under the old regime. The cumbersome nature of the Court’s processes, by contrast, contributed to a very narrow focus: only ejectment matters came before the Court.

    Table 2

    Type of dispute 1971–2001

    Relative success rates

    The Tribunal offers litigants a very different service to the Court when success rates are compared. Tenants were never successful applicants before the Court for the simple reason they were never applicants. Any limited tenant success lay in the Court’s dismissal of landlord applications, ranging from 20–31 per cent over the period 1971 to 1989. In the vast majority of these matters, however, this order was made where the landlord failed to appear, so the orders were to a significant degree with landlords’ consent, or at least complicity, rather than tenant opposition. In the Tribunal, by contrast, a very different picture emerges.

    The figures show clearly that tenants are active players: for the first time landlords’ obligations have been upheld in favour of tenants. For example, before Waverley Local Court in 1971–86 not one landlord was held to have breached an obligation in a residential tenancy agreement. Under the Tribunal, tenants made 410 applications in 1991 against landlords for breaches of agreements, this figure dropping slightly to 370 in 1996, while rising dramatically to 689 in 2001. Tribunal figures show that once withdrawn applications are excluded, both landlord and tenant applicants have similarly high success rates. From 1991 to 2001 success rates ranged from 76–85 per cent for all applicants.

    This is not to suggest that the Tribunal has operated to confer disproportionately greater benefits on tenants. Notably, the Tribunal has also proved to be a very effective mechanism for redress for landlords where tenants are in breach. Landlords sued tenants for breaches in 128 matters in 1991, in 333 matters in 1996 and 483 matters in 2001. Importantly, bearing in mind that over the period, the success rate for applications is roughly equal for both landlords and tenants (again, excluding withdrawn applications), landlords are highly likely to have orders made in their favour in these matters. It follows that while tenants are therefore seeing real success in their attempts to make landlords abide by the terms of residential tenancy agreements, it is also the case that landlords are prevailing more frequently in numerical terms than before the Court, given the larger volumes of matters. Moreover, they are successful in a higher percentage of cases than before the Court (76–85 per cent before the Tribunal as against 69–80 per cent before the Court).

    Overview

    These findings suggest some preliminary answers to the question: are tribunals more effective and efficient mechanisms for delivering justice than ordinary courts? To begin with, from a purely quantitative perspective, there is a demonstrable overall increase in the delivery of justice. A progressively increasing number, and diversity, of matters appear before the Tribunal for resolution. From the tenants’ perspective in particular, they now avail themselves of rights wholly unexercised before the former court regime. By contrast, Court files from the years 1971–1989 reveal not a single case of a landlord being sued for breach of obligations in a lease — even where the standard residential, as opposed to commercial, lease imposed a duty on landlords to keep the premises in a state of repair.[9]

    But landlords too have an increased presence before the Tribunal by comparison with the Court. So they also have benefited from the new regime, both in relation to terminations and breaches. The Tribunal is, therefore, very much a double-edged sword for tenants: while redress is more accessible, they walk a compliance tightrope under the new regime. A landlord can be swiftly before the Tribunal, for instance where the tenant has missed a rental payment, and a termination order may be granted before the tenant can manage to organise payment. For obvious reasons, landlords are not clamouring to restore the Court where, from 1971–1989, tenants typically had, on average between 8 and 10 weeks to remedy breaches to stave off repossession due to the cumbersome nature of the process.

    These changes can be largely attributed to the ease of access to the Tribunal for parties to a dispute where the cost of an application has fluctuated between $10–28 over the examined period, substantially less than before the Court, and where costs are not available. Also, legal representation is in general prohibited, while government-funded tenancy advice services (such as the Tenancy Advice and Advocacy Program) can assist tenants with the preparation and even presentation of their matters before the Tribunal. An important further consideration is the short time it takes to get a matter heard by the Tribunal. Over the period in question, the average time from application to hearing was in the region of two to three weeks. This factor clearly makes the viability of going for resolution by arbitral body very much more attractive.

    A central question this study appears to offer a perhaps unexpected answer to is the extent to which more informal mechanisms for dispute resolution, far from reducing the impact of law on the resolution of conflict, actually increase legal rules. But in contrast to some who are critical of the increasing ‘juridification’ of social relations, and who might see this as an undesirable development,[10] the reality suggests that it might be operating in beneficial ways. Under formal, costly court-based processes, only the tip of the pyramid of disputes is subjected to the scrutiny of law; and

    access to the courts is often dependent on economic power. This was certainly the case prior to 1989 for tenancy disputes.

    The data revealed in this study appears to show how a tribunal can bring a much wider array of disputes under the spotlight of the law than courts can, and in so doing can extend the rule of law in society. Paradoxically, they do so more than courts can because the formality of courts operates to exclude a large number of matters from ever being the subject of formal adjudication.[11] The fact that both landlords and tenants in general, and their representative bodies, despite their many and varied (and often incompatible) criticisms of the legislation have not called for a return to the old court system suggests that a far more effective system of procedural justice is presently in place.

    The picture that is beginning to emerge suggests that Taylor’s assessment of the Tribunal in its early days has not been borne out by experience. A gradually increasing number of tenants have been using the Tribunal, as Table 2 demonstrates, indicating an effective measure of public education about its processes. Also, the disproportionate access by landlords to representation (in the form of real estate agents) has not led to higher success rates in their applications than those where tenants are applicants — at least where tenants actually appear as respondents.

    Nonetheless, while this model represents a positive step forward, the speed of its procedures is rather too landlord-friendly to be the optimal model for a truly just regime, especially in termination applications, given the dire economic disadvantage faced by many tenants on termination. The foreshadowed reforms to the residential legislation in New South Wales in 2006[12] should therefore incorporate provisions to allow tenants greater flexibility to remedy breaches where landlords move too swiftly to terminate a tenancy and seek repossession.


    [*] BRENDAN EDGEWORTH teaches Law at the University of New South Wales.*

    *I would like to thank Doris Duffy, Kevin Duffy and Wendy Finnegan for their assistance. Errors of omission and commission are my own.

    © 2006 Brendan Edgeworth

    email: b.edgeworth@unsw.edu.au

    [1] James Taylor, ‘Representing Tenants’, (1995) 20(2) Alternative Law Journal 81–3. Similar sentiments have been expressed in relation to the Victorian tribunal: see Ruth Adler, ‘In Whose Interest?’ (1989) 14(5) Legal Service Bulletin 209–11; Andrea Treble and Lynda White, ‘Victoria’s RTT — Renovate or Demolish?’ (1993) 18(4) Alternative Law Journal 163–66.

    [2] See generally, Landlord and Tenant (Amendment) Act 1948 (NSW) s 65.

    [3] For an analysis of the prevalence of these tenancies today, see David Dobell, ‘Those Powerful “Protected” Tenants’ (1990) 15(6) Legal Service Bulletin 270–73.

    [4] Residential Tenancies Act 1987 (NSW) ss 2330.

    [5] The Act does contain provisions that allow the Tribunal to revise an ‘excessive’ rent: see ss 44–52. Tenants have found it notoriously difficult to establish grounds for reduction of rent given the stringency of these criteria.

    [6] This Tribunal was introduced by the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) to replace the Residential Tribunal which in turn replaced the Residential Tenancies Tribunal in 1998.

    [7] The term ‘landscape of disputes’ derives from the work of Marc Galanter. See, eg, ‘Why the Haves Come out Ahead: Speculation on the Limits of Legal Change’ (1974) Law & Society Review 95–160.

    [8] The figures for 1991, 1996 and 2001 are estimates because the Tribunal until 2003 did not keep separate data for public housing matters on a local area basis. Even if the numbers of Department of Housing applications in the Waverley local area deviated from the statewide norm in those years, the figures are highly unlikely to produce an error factor in excess of 1%.

    [9] It is important to note an exception: the granting of jurisdiction over rental bond disputes to the Consumer Claims Tribunal in 1977 finally allowed wider access to justice over these matters. Significantly, not one such dispute appeared in the Waverley Court files from 1971–1977.

    [10] See generally, Gunther Teubner (ed), The Juridification of Social Spheres (1987).

    [11] H Genn, Paths to Justice: What People Do and Think about Going to Law (1999).

    [12] See NSW Office of Fair Trading, ‘Residential Tenancy Law Reform: Options Paper’, (2005).


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