The reasonable & proportionate test

The Residential Tenancies Amendment Act 2018 (Vic) (RTAA) introduced a reasonable and proportionate test into the Residential Tenancies Act 1997 (Vic) (RTA). This page details:

• What orders the reasonable and proportionate test applies to
• What is the reasonable and proportionate test
• How the test has been interpreted
• How the test will be interpreted

Relevant orders

The Tribunal will have regard to whether an order is “reasonable or proportionate” in determining whether to:

1. make a possession order under s 330(1)(f);
2. dismiss a possession order and make a compliance order under s 332A(1)(a); or
3. make an order terminating the residential rental agreement, residency right or site agreement under s 376(1A) following a notice to leave hearing.

What is reasonable and proportionate?

Under s 330(3)(f) RTA, the Tribunal can only make a possession order in relation to a residential rental, rooming house, caravan or Part 4A site agreement if the Tribunal is satisfied that it is reasonable and proportionate to do so having regard to the interests of:

• the residential rental provider, rooming house operator, caravan park owner, site owner or mortgagee as the case requires;
• the renter, resident or site tenant;
• any co-tenants or co-site tenants or other residents;
• any neighbours or any other person who may be, or who has been affected, by the facts or behaviour of the renter, resident or site tenant to whom the notice to vacate was given.

To determine whether it is reasonable and proportionate to make a possession order, the Tribunal must consider the criteria under section 330A RTA. These are:

1. the nature, frequency and duration of the conduct of the renter which led to the notice to vacate being given, including whether the conduct is a recurring breach of obligations;
2. whether the breach is trivial;
3. whether the breach was caused by the conduct of any person other than the renter;
4. whether the renter has made an application for an intervention order and whether it was in force, contained an exclusion condition or other matters the Tribunal considers relevant;
5. whether the breach has been remedied as far as is practicable;
6. whether the renter has or will soon have capacity to remedy the breach and comply with their obligations under their rental agreement;
7. the effect of the conduct of the renter on others;
8. whether any other order or course of action is reasonable available instead of making a possession order;
9. as the case requires, the behaviour of the residential rental provider or the provider’s agent etc; and
10. any other matter the Tribunal considers relevant.

The Tribunal has held that criteria (a) to (g) are irrelevant where the ground for seeking the order is not based on any action or conduct of the tenant. On this, see Rizio v XEP [2020] VCAT 882 at [24] which concerned an application for the landlords to move into the property.

How has the test been interpreted?

Due to the COVID-19 pandemic, the commencement of the RTAA was delayed and the government passed the COVID-19 Omnibus (Emergency Measures) Act 2020 (Vic) and the Residential Tenancies (COVID-19 Emergency Measures) Regulations 2020 (Vic), which amended the RTA for a temporary period. The temporary amendments introduced a new procedure for evictions and replicated the reasonable and proportionate test in the RTAA.

The definition of reasonable and proportionate under the COVID-19 tenancy regime (s 538 RTA) is the same as the definition in s 330A.

The following outlines the case law with respect to the equivalent COVID-19 reasonable and proportionate test. Note that some of the cases were decided in the context of significant COVID-19 related restrictions, and this may have influenced the Tribunal’s decision-making.

The decision as to whether the reasonable and proportionate test is satisfied has been framed by reference to whether on balance the impact of making the order on the renters is “harsher” or “more severe” than the impact on the residential rental provider of not making the order, or whether the hardship to the renter outweighs the hardship to the residential renter provider. See Mikho v Burgess [2020] VCAT 691 at [14]; Rizio v XEP [2020] VCAT 882 at [32]; Struth v Thwaites [2020] VCAT 788 at [37].

It has been held that when taking into account the interests of the relevant parties it is necessary to consider their case at its highest at the time of the hearing: LKZ v BSL [2020] VCAT 909 [25] and [27].

Factual considerations which have influenced the Tribunal’s decision on the reasonable and proportionate test have included:

• relationship breakdown between the renter and residential rental provider: Towt Bros Pty Ltd v Clissold [2020] VCAT 1116 at [42] (Towt);
• the availability of other accommodation for the renter: Towt;
• demand for accommodation by others in need: Towt;
• for public housing, the residential rental provider’s need to ensure it has revenue to fulfil its “role as a provider of well-maintained, safe and habitable public housing stock” and “the effect of significant amounts of unpaid rent on the residential rental provider’s public housing operations”: Director of Housing v Nguyen [2020] VCAT 1018;
• whether the residential rental provider is in a particularly precarious position, such as in substantial debt: Reich v Power [2020] VCAT 1232, or living in temporary accommodation like a caravan park: Struth v Thwaites [2020] VCAT 788;
• the impact of eviction on the renter’s children: LVM v Salvation Army [2020] VCAT 1209;
• in cases of renter damage or misconduct, whether the renter has expressed remorse: LVM v Salvation Army [2020] VCAT 1209;
• in cases of the residential rental provider seeking to sell the property, whether the sale is motivated by purely economic considerations: Phan v Gunaraathna [2020] VCAT 1185;
• in cases of the residential rental provider seeking to move in, whether the residential rental provider owns a number of other properties: Mikho v Burgess [2020] VCAT 691; Rizio v XEP [2020] VCAT 882;
• whether the residential rental provider ambushed the renter or offered assistance and support: Struth v Thwaites [2020] VCAT 788 at [28]-[30].

How will the test be interpreted?

The case law on s 538 provides guidance as to how the Tribunal will interpret the reasonable and proportionate test in s 330A. It demonstrates how the outcome will likely turn on the facts and circumstances of the case, which also illustrates the types of arguments that can be made.

In addressing the Tribunal on whether eviction is reasonable and proportionate, it may be relevant to raise the Charter of Human Rights and Responsibilities Act 2006 (Vic) (the Charter).

Pursuant to s 32 of the Charter, so far as it is possible to do so consistently with their purpose, statutory provisions must be interpreted in a way that is compatible with human rights. It may be arguable that specific human rights lend weight to an argument that eviction would not be reasonable and proportionate.

Charter rights that may be relevant include:

• the right not to have one’s privacy, family or home unlawfully or arbitrarily interfered with (s 13);
• the protection of families (s 17(1));
• the right for children to have such protection as is in their best interests and is necessary by reason of them being a child (s 17(2)); and
• cultural rights (s 19).

In making submissions in relation to the application of s 32 of the Charter to the reasonable and proportionate test, you should be aware of the decision of Momcilovic v The Queen [2011] HCA 34 (8 September 2011) noting that s 32 does not permit a court to strain the language of a provision.

The way in which the reasonable and proportion test will be interpreted will likely only be fully known as the body of case law on each of the criteria in the reasonable and proportionate test continues to develop, and/or the Supreme Court articulates a test for how the Tribunal should weigh up each of those factors and the interests of each of the parties under s 330(1)(f) of the RTA.