This article details a VCAT case regarding a breach of noise and other nuisance rules and whether that lead to a loss of rent in a neighbouring lot.
So what is the case?
The case is JRVT Pty Ltd v Traczyk (Owners Corporations) [2025] VCAT 108
What is it about?
This proceeding concerns the building located at 50 Barry Street Carlton, Victoria, (‘the building’), which is a 7-storey high-rise comprising 90 lots on the plan of subdivision. Most residential lots in the building are primarily used for student accommodation.
The applicants claim that the respondent engaged on a course of conduct (related to unreasonable noise) that was in breach of Model Rule 6.2 of the Owners Corporations Rules in Schedule 2 of the Owners Corporations Regulations 2018 (‘the Rule’), which provides:
“6.2 Noise and other nuisance control
(1) (2) An owner or occupier of a lot, or a guest of an owner or occupier, must not unreasonably create any noise likely to interfere with the peaceful enjoyment of any other person entitled to use the common property.
Subrule (1) does not apply to the making of noise if the Owners Corporation has given written permission for the noise to be made.”
The applicant maintained that the respondent engaged in conduct which involved loud and prolonged screaming and yelling, including the use of bad language, and the banging of doors and the throwing of objects.
They claimed that, as a lot owner and as an occupier of a lot, the respondent was bound by the Rule and that the noise she created was such that it was likely to interfere with the peaceful enjoyment of any other persons entitled to use the common property.
The applicants also maintained that, as lot owners, they have the benefit of the Rule.
The applicants claimed damages for rental losses incurred in the years 2021, 2022 and part of 2023. They maintained that, because of the respondent’s behaviour, they were unable to rent their units on the third floor of the building as they could not ensure that they could provide their tenants with quiet enjoyment of their rented premises.
They submitted that, as residential rental providers, they had a duty under section 67 of the Residential Tenancies Act 1997 (Vic) (the ‘RTA’) to provide the tenants with quiet enjoyment.
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Section 67 provides:
Quiet enjoyment
A residential rental provider must take all reasonable steps to ensure that the renter has quiet enjoyment of the rented premises during the residential rental agreement.
Note
This section is a duty provision and a contravention of this section may be dealt with as a breach of a duty under Part 5 and other provisions of this Act.
They further maintained that clause 9 of the Residential Tenancy Agreements entered into by the applicants provided that “the landlord must take all reasonable steps to ensure that the tenant has quiet enjoyment of the premises.”
The applicants submitted that they acted reasonably in not attempting to let their apartments on level 3. They stated that, in an email dated 31 October 2019, John Meyers of SHA informed them, among other things, that “going forward we would not be in a position to rent out any of the units [on level 3] without disclosing the ongoing issues with new applications. This is of course going to make it almost impossible to lease”.
Kanter v Milroy Investments Australia Pty Ltd
(‘Kanter’), held that the breach of a rule by a lot owner or occupier was a breach of the statutory duty imposed by section 141 of the Owners Corporations Act 2006 (Vic) (the ‘OC Act’) and that a breach of the rules gives the Tribunal powers to make an order for damages.
Tang v Fossaert (Tang)10, held at paragraph 28 that:
“In a proceeding based on nuisance, a court or VCAT must first consider whether the nuisance was a cause of the loss or damage alleged to have been sustained, and also whether that loss or damage was reasonably foreseeable by the person causing the nuisance at the time when the nuisance occurred. If it was not reasonably foreseeable the loss of damage is too remote and is not recoverable. These principles should apply equally to a proceeding based upon a breach of statutory duty (imposed by an Owners Corporation rule) about noise or nuisance.”
The Applicant claimed the noise created by the respondent was the cause of their loss of rent and that this loss was reasonably foreseeable by the respondent. The Applicant claimed in excess of $115k.
The Applicant argued that they could not lease the premises without disclosing the noise issues but could not point to any legal obligation that required such disclosure.
So what did the Tribunal need to decide?
- Did the respondent engage in behaviour that was in breach of Model Rule 6.2(1)? The Tribunal was satisfied the respondent engaged in conduct creating noise to interfere with the peaceful enjoyment of residents and in breach of the model rule.
“The behaviour included loud screaming, yelling and banging noises in the early hours of the morning. The respondent was captured banging the metal railing at the bottom of her roller blinds on the metal window frame, making a very loud metallic banging sound that echoed across the buildings. She was captured screaming and wailing, yelling loudly both from inside her unit and from her window and making other loud noises such as slamming doors and dragging furniture, from inside her apartment.”
- Was the respondent’s behaviour the cause of the applicants’ loss or damage?
The Tribunal was not satisfied that the noise issues were the cause of not renting the lots. Up until Covid, the applicant had been able to lease their lots for 2 years during the noise issues.
The Tribunal found: “the applicants assessed a range of factors when they made the decision not to advertise and not to offer the units for rent, and that those factors included the behaviour of the respondent and the high vacancy rates caused by the border closures. I am also satisfied that both these factors likely played some part in their decision to not advertise. Whatever the reasons, I find that the applicants’ conscious and deliberate decision to not advertise and to not offer the units for rent was the cause of the applicants’ loss rather than the respondent’s disruptive behaviour.”
- Did the applicants act reasonably in not advertising or offering the units for rent?
Given the above the Tribunal did not consider it was reasonable not to offer the rents for lease.
- Did the applicants take all reasonable steps to mitigate any loss?
The Tribunal noted that “When faced with a breach, an aggrieved party must take all reasonable steps to mitigate any potential loss flowing from the breach. I find that the applicants in this proceeding did not do so.”
“They did not consider other options, such as advertising the units with all legally necessary disclosures and with incentives to prospective tenants, such as reduced weekly rent or a month or two of free rent.”
“The applicants should have tested the market and attempted to relet the units. Had the applicants done so, they would have been in a far better position to argue that they took all reasonable steps to mitigate their loss. Instead, they made no attempt at all to advertise or to offer the units to the market with all necessary disclosures and incentives, deciding instead to take the units off the market indefinitely, without considering or attempting alternative strategies.”
The Tribunal was critical that they did not follow the dispute resolution procedure in Part 10 of the OC Act or attempt to lease with a reduced rent, for example.
The application was dismissed.
Summing up
Just because a lot owner is in breach of its statutory duties does not mean that it will be ordered to pay loss and damage to the lot owner.
It’s a tough blow to lot owners facing noise issues. The problem with this applicants case is that they were claiming too much and failed to properly mitigate their losses by taking actions the Tribunal considered reasonable in order to limit their losses.
If you are faced with noise issues, follow the dispute resolution procedure, try and mitigate your loss and then go to VCAT.
Had the Applicant tried to lease the property with tenants (who no doubt would have terminated early because of the noise) might have given the applicant a better result.
What is the most surprising in this matter is having decided there was a breach of the rules there was no order to prevent the future breach of the rules by limiting the noise. It is unclear whether that was simply because the Applicant did not seek that relief or because the Tribunal did not want to make an order. Given the decision is silent on this it may be the Applicant did not press or seek any orders about that.
Phillip Leaman
Tisher Liner FC Law
E: ocenquiry@tlfc.com.au
P: 03 8600 9370
This post appears in Strata News #742.
This article has been republished with permission from the author and first appeared on the Tisher Liner FC Law website.
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Read Next:
- VIC: Q&A When Lot Owners Take Over Common Property
- VIC: Q&A Section 155 – Notice to Rectify Breach
- VIC: Q&A Vibrant and Connected Communities
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