Establishing a Landlord's Duty of Care - International Law Office

International Law Office

Commercial Property - Australia

Establishing a Landlord's Duty of Care

November 09 2001

Liability for Unsafe Premises
Negligent Tenants Limit Liability
Does Duty of Care Extend to Criminal Conduct?


The common law duty of care owed by a landlord to his/her tenants, members of the tenant's household and other third parties has been a source of concern since the case of Northern Sandblasting Pty Ltd v Harris (1997). Practitioners can be reassured that the extent of the landlord's duty has been clarified to some degree by Bartlett v Jones (2000) and Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000).

Liability for Unsafe Premises

Background
Northern Sandblasting Pty Ltd v Harris [1997] 188 CLR 313; 146 ALR 572 was a controversial case regarding a landlord's duty of care where the judges' opinions were divided. Mr and Mrs Harris rented a house in Queensland from Northern Sandblasting Pty Ltd in December 1986. On June 4 1987 the tenants' daughter, Nicole Harris, then aged nine, suffered severe injuries after being electrocuted while turning off a water tap in the garden.

The trial judge found that the injuries had occurred as a result of the failure by a qualified electrician, who had carried out repairs on a stove at the property two days earlier, to discover and repair a hazardous defect in the residence's electrical system. The trial judge found the electrician liable in negligence but dismissed the claims against the landlord and the North Queensland Electricity Board. On appeal, a majority of the Queensland Court of Appeal held that the landlord, along with the electrician, was liable for the injuries. The landlord challenged the decision in the High Court of Australia.

Decision
A majority of the High Court of Australia (Chief Justice Brennan and Justices Toohey, Gaudron and McHugh) upheld the Queensland Court of Appeal's decision that the landlord was liable. However, the judges reached their decisions in four different ways, and there was no majority in favour of the two grounds for the decision.

Brennan and Gaudron found that the landlord had breached its duty of care in letting the premises in an unsafe condition. Brennan held that a duty is owed by a landlord to a tenant and to those who, to the landlord's knowledge, are intended to occupy the premises. Brennan held that the duty owed by a landlord is to detect and rectify "defects in the premises at the time when the tenant is let in possession" and does "not extend to defects in the premises… discoverable only after the landlord parts with possession". Gaudron took a similar view but did not limit the duty to the beginning of the tenancy. However, Dawson, Toohey, Gummow and Kirby disagreed, and McHugh did not discuss the point.

Toohey and McHugh found that the landlord had breached a non-delegable duty of care by failing to ensure that the electrician had exercised reasonable care when repairing the stove. Quoting from Justice Mason in Kondis v State Transport Authority (1984) 154 CLR 672, McHugh asserted that a non-delegable duty of care substitutes "for the duty to take reasonable care, a more stringent duty, a duty to ensure that reasonable care is taken". According to Toohey the landlord's assumption of responsibility, which was determined according to a list of factors, could not be discharged simply by engaging an independent contractor. On this issue Brennan, Dawson, Gaudron, Gummow and Kirby disagreed.

Because of the differences in the judgments many practitioners considered the decision unsatisfactory, as the extent of landlords' duties to tenants and other members of their households remained unclear. The lack of a clear majority in Northern Sandblasting gave rise to fears that some of the more extreme views expressed in the case would expose landlords to liability for defects beyond their knowledge and control. However, two further decisions by the Australian High Court have clarified much of the uncertainty surrounding the scope of landlords' common law duties to tenants.

Negligent Tenants Limit Liability

Background
In Jones v Bartlett [2000] HCA 56 the defendant, Mr Bartlett, was the landlord of residential premises in Western Australia, which were leased to Mr and Mrs Jones in November 1992. The house was built in the late 1950s or early 1960s and contained a full-length glass door set in a wooden frame. The glass door had never been replaced.

On the evening of November 27 1993 Mr and Mrs Jones' son, Marc (then aged 23), sustained a serious injury when, failing to notice that the door was closed, he struck the glass door with his knee causing it to shatter explosively. The glass door was sufficiently thick to satisfy the Australian Safety Standard when it was installed, but would not have satisfied the applicable Australian Safety Standard immediately before the lease was entered nor at the time of the accident.

The claimant relied on three different causes of action:

  • a breach of common law duty of care (it was alleged that the landlord owed a duty to take all reasonable measures to ensure the premises were free from dangers);.

  • a breach of statutory duty of care (it was alleged that the landlord was an 'occupier' and therefore owed a duty of care under the Occupiers' Liability Act 1985 (WA)); and

  • a claim in contract (it was alleged that it was an implied term of the lease agreement that the premises would be let in a fit and proper state).

Specifically, it was alleged that an inspection should have been made before letting that would have revealed the danger posed by the glass door, and that the failure to do so constituted negligence.

At first instance in the District Court of Western Australia, Commissioner Reynolds found in favour of the plaintiff under statute (A$75,000), but reduced his damages by 50% for contributory negligence. The decision was overturned on appeal to the Full Court of the Supreme Court of Western Australia, which found that the claimant's carelessness was the sole cause of his injury.

The verdict
The Australian High Court upheld the Full Court's decision. The High Court unanimously found against the plaintiff in respect of his claims under statute and in contract. In a six to one decision (Justice McHugh dissenting), the majority of the High Court also found against the plaintiff in respect of the claim in negligence. However, there were five separate judgments.

The High Court of Australia took the opportunity to review its earlier decision in Northern Sandblasting Pty Ltd v Harris. In doing so, the court was unanimous that the only clear principle that emerged from this case was that the former rule of the common law that landlords had a limited immunity from liability in negligence to their tenants established in England by Cavalier v Pope [1906] AC 428 was "outmoded and had been overtaken by the generic development of the law of negligence following Donoghue v Stevenson".

Common law duty of care
The High Court stated unequivocally that landlords have a duty to take reasonable care to avoid foreseeable risk of injury to prospective tenants, members of their household and other persons lawfully on the premises. The practical extent of the landlord's duty requires all reasonable steps to be taken before the commencement of a tenancy to ensure that the premises are reasonably fit for the purposes for which they are let (ie, for habitation as a domestic residence). The court was not prepared to visit landlords with a higher or special duty of care, as suggested by some judges in Northern Sandblasting, as long as premises are reasonably habitable at the commencement of a tenancy.

The court determined that landlords have a duty to take reasonable steps to ascertain the existence of hidden defects, and to take reasonable steps to remove these and make the premises safe. The court made it clear that a landlord is not obliged to set up a system of regular inspections for defects during a tenancy. What is required by way of 'reasonable steps' to ascertain the existence of defects should be judged by an ordinary reasonable person. In order to satisfy this duty the premises must be inspected at the commencement of the tenancy to identify any dangerous defects (eg, live wires or stairs unable to bear a person's weight) and remedy them, engaging experts to do so if necessary. It is sufficient if the initial inspection is undertaken by a layperson, unless the premises are so obviously defective that more expertise is required (as was the case in Northern Sandblasting). The court ruled that there was no evidence to support the claimant's supposition that had the premises received an expert assessment it would have resulted in a recommendation to replace the glass in the door.

The court pointed out that what is reasonable varies depending on the facts of each case and may include such considerations as the use of the premises, the terms of the lease and statutory requirements. Gleeson stated that "whether it is reasonable to require an owner of the premises to have them inspected by an expert before letting depends on the circumstances of the case. There is no answer of universal application".

Statutory duty of care
In the relevant jurisdiction of Western Australia there was a statutory duty on the occupier to take reasonable care for the safety of entrants to the premises. The occupier was defined as "the person occupying or having control of the land or the premises". The landlord had a right to enter the premises, especially for the purposes of repairs and maintenance, but it was held that the landlord did not become an occupier unless it properly asserted an immediate right to enter the premises and exercised control in that way.

Claim in contract
The claim in contract was defeated on the basis that the claimant, Marc Jones, was not himself a party to the lease and was therefore prevented by privity of contract from enforcing it. It was held that there was no breach of any of the lease's express terms.

Any suggestion that a landlord owes a non-delegable duty of care to provide safe premises to a tenant or a member of the household, or that a landlord has a duty to inspect the premises to discover latent defects, no longer applies. The court is not prepared to push the boundaries of the duty of care until it borders on strict liability.

Does Duty of Care Extend to Criminal Conduct?

The question of whether a common law duty of care arises and extends to avoidance of foreseeable risks of injury caused by the criminal conduct of a third party was considered in the case of Modbury Triangle Shopping Centre Pty Ltd v Anzil (2000) 176 ALR 411.

Background
In July 1993 Mr Anzil, a retail employee, was attacked and assaulted by three unidentified assailants in an unlit car park attached to the shopping centre in which he worked. He sued the landlord, Modbury Triangle Shopping Centre Pty Ltd, for breach of duty of care seeking damages for personal injuries.

Both the District Court and Full Supreme Court of South Australia found that the duty of care owed by a landlord to a tenant extends to employees such as Anzil. The Full Court decided that the landlord's duty of care in this case extended to ensuring that there was sufficient lighting when both workers and customers were at the centre, and that failure to do so was sufficient to establish causation in relation to the injuries suffered by Anzil. The landlord appealed.

The decision
A majority (four to one) of the Australian High Court overturned the decisions of the lower courts, finding that the landlord did not owe a duty of care to Anzil to prevent harm by the criminal conduct of third parties.

Duty of care
While landlords owe a duty of care to tenants, their employees, customers and anyone lawfully in common areas, they are only required to take reasonable steps to protect against dangers. The court reasoned that the duty should not be extended to require the landlord to prevent the "random and unpredictable" criminal acts of third parties, for this would impose too high a burden. If there was a general legal duty requiring one party to prevent harm to another, the burden imposed would be "intolerable" in terms of practicality and fairness. In the absence of a 'special relationship' such as employer and employee, it was deemed to be inappropriate to impose such a duty.

Causation
The court further held that while Modbury's failure to leave the lights on may have facilitated the attack, it had not caused it. The shopping centre had no control over the attackers. In any event, the attackers might not have been deterred by lighting in the car park.

Justice Kirby's dissenting judgment adopted a more policy-oriented approach in finding that the criminal acts in this case did fall within the scope of the landlord's duty. He propounded that individual aspects of the case, such as the fact that the store Anzil worked in was the last to close in the shopping centre, repeated requests by Anzil's colleague to Modbury to keep the area lit until a later hour and Modbury's knowledge of previous criminal activity in the unlit car park were sufficient to allow a finding that a duty of care was breached.

On the issue of causation he argued that while Modbury's omission was neither the sole cause of Anzil's damage nor the direct cause of the criminal conduct, it was sufficient that Modbury's negligence had increased the risk of attack.

While the court took a restrictive view of the circumstances under which a landlord will be held liable for acts of third parties, there is an argument that a duty may exist for certain types of crime. The court concluded that there may be circumstances where criminal conduct is attended by such a high degree of foreseeability and predictability that the law may impose a duty to take reasonable steps to prevent it. Prudent landlords should ensure that procedures are put in place facilitating crime prevention. More preventable and predictable crimes in the future may persuade courts that landlords are liable in negligence for failing to take measures to prevent damages suffered by victims of crimes.


For further information on this topic please contact Katerina Petrogiannakis or Toby Mittelman at Arnold Bloch Leibler by telephone (+61 3 9229 9779) or by fax (+61 3 9229 9889) or by email (kpetrogiannakis@abl.com.au or tmittelman@abl.com.au).



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