Good records, good outcome: Why accurate and detailed records protect property managers

A recent decision of the Australian Capital Territory Supreme Court (the Court) demonstrates that thorough record keeping and clear documentation of tenant communications can be decisive in defending claims against property managers and lessors, particularly where allegations of property defects are in dispute.

Background

This dispute arose between the property manager, the lessor, and the tenant of a residential property located in Dunlop, Australian Capital Territory.

From 18 February 2020, the tenant leased the property from the lessor through the property manager.

It was alleged that on 25 June 2020, while turning on a light switch at the property, the tenant sustained an electric shock which caused a loss of consciousness and a subsequent fall (the alleged incident). At first instance, the tenant alleged that she had reported issues with the subject light switch to the property manager in or around February 2020. However, prior to the hearing, the tenant conceded that there were no identifiable issues with the light switch as at February 2020 and instead claimed that it had “deteriorated over time”.

The proceedings

The tenant commenced proceedings against the lessor and property manager in the Supreme Court of the Australian Capital Territory, claiming damages for injuries allegedly sustained from the alleged incident. The tenant claimed that the lessor and property manager breached their duty of care under section 42 of the Civil Law (Wrongs) Act 2002 (ACT), contending that:

• The lessor and property manager ought to have known there was a probability of harm being suffered by the tenant as a result of electric shock if precautions were not taken;
• The risk of harm was serious;
• The burden of taking precautions against such a risk was minimal; and
• They failed to take the necessary steps to identify and rectify any defects at the property.

The Supreme Court’s analysis

The Supreme Court expressed concerns regarding the tenant’s credibility noting inconsistencies in the evidence. The tenant originally submitted that the light switch was defective in or around February 2020. However, the property manager produced an entry condition report, supported by photographs, in which the tenant confirmed that there were no defects in the light switch as of February 2020. This evidence undermined the tenant’s credibility, and the tenant changed her evidence to allege that the subject light switch had “deteriorated over time”. Considering the changing narrative, the Court held that the alleged incident must be supported by independent contemporaneous evidence.

The tenant was unable to provide convincing corroborating evidence that established that she sustained an electric shock on 25 June 2020. The property manager produced correspondence with the tenant dated three days after the alleged incident in which the tenant notified some issues with a power point, however, she failed to mention that she had sustained an electric shock. It was also noted that the tenant delayed seeking medical attention, returning to work the following day but then informed her employer on 2 July 2020 that “I have just been thrown to the floor" by an electric shock, notwithstanding the fact that the alleged incident had occurred a week earlier.

Considering the evidence produced by the parties, the Court found that the tenant failed to establish that she sustained an electric shock on 25 June 2020.

Even if the Court had accepted that the alleged incident occurred, the Court held that the lessor and property manager did not know, and could not reasonably have been expected to know, of any defect in the light switch. Extensive email correspondence covering the period from the start of the tenancy through to the date of the alleged incident produced by the property manager indicated that although the tenant had raised numerous issues during the tenancy, but none of the complaints referenced defective light switches or power points.

The property manager’s file notes and inspection records also proved critical. Where the tenant alleged that the lessor and property manager ought to have known of the defects if they followed through with meetings and inspections, the property manager was able to rely upon emails confirming inspection appointments, the tenant’s responses acknowledging the property manager’s attendance at the property and notes of discussions which supported that there were no missed inspections.

Acting Justice Balla held that “as apparent from the email correspondence, (the property manager) was extremely diligent in trying to attend to all of the defects in the property reported by (the tenant)…I prefer the evidence of (the property manager), which was consistent with the contemporaneous documents, where it conflicts with the evidence of (the tenant).”

In the absence of a complaint made prior to the alleged incident, or any evidence of an inspection being missed or cancelled, there was no opportunity where the property manager or lessor should have identified the defect. Therefore, the Court held that the risk was not foreseeable and there was no breach of the duty owed to the tenant.

Conclusion and orders

The Court held in favour of the lessor and property manager, ordering that the tenant pay their respective costs.

The Court emphasised that it would not accept the tenant’s oral evidence regarding the alleged incident and defects unless supported by independent contemporaneous material. The Court found that:

• the tenant failed to establish that an electric shook occurred on the date alleged;
• §no reliable evidence showed that complaints regarding light switches or power points were made before the alleged incident; and
• the property manager’s records, which were consistent, detailed and reliable, highlighted there were no complaints referring to the defects and they did not miss any inspections or meetings which would have put them on notice of the defects.

Ultimately, this is a case where a lessor and property manager were successful in defending a claim because they kept good records and were able to demonstrate what repair and maintenance issues had been raised by the tenant. The decision highlights that good records are not just best practice, but are a key risk-management tool in defending personal injury claims.

Read another story about property management: A warning to property managers about letting properties for an unauthorised purpose.

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