Snail on GavelWho cares? And more to the point, who has a duty to care?

It was 90 years ago when a ginger beer contaminated by a snail would ultimately lead to the establishment of a legal principle that landlords and PMs alike must adhere to.

Little did Mrs Donoghue know when she went for an icecream float in late August 1928, that her experience would lead to what is considered to be the most important case in the 800 years of common law. The ruling by Lord Atkin, the Chief Justice of the House of Lords, in the Donoghue v Stevenson (1932) case would lay the foundation for the modern law of negligence and establish the general principles of duty of care.

The case in a snail shell: Mrs Donoghue drank a bottle of ginger beer in a café. A dead snail was in the bottle. Mrs Donoghue fell ill and sued Mr Stephenson, the ginger beer manufacturer. The House of Lords held that Mr Stevenson owed a duty of care to Mrs Donoghue, which was breached, because it was reasonably foreseeable that failure to ensure the product’s safety would lead to harm of consumers. Prior to this case, liability for personal injury in tort[1] usually depended on showing physical damage inflicted directly or indirectly. Being made ill by consuming a noxious substance did not qualify as either. The decision created a new type of liability in law – a fault-based system (negligence) which only required injury. Prior to this case, there was also no general duty of care and therefore no general liability for negligent behaviour.

“In English law there must be, and is, some general conception of relations giving rise to a duty of care… You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour…,” stated Lord Atkin.

Today, ‘duty of care’ is the obligation to avoid acts or omissions which are reasonably foreseeable to cause damage to another. And when it comes to rental properties, both the landlord and the property manager have a duty of care.

Landlord Duty of Care
‘Duty of care’ is defined by the Australian government as “an obligation to take reasonable care to avoid foreseeable harm to another person on their property”.

Landlords must take reasonable care to avoid foreseeable risk of harm to their tenants and other entrants at the property. Common law dictates that landlords must guarantee the safety of their rental properties, including:

  • ensuring installations such as gas, electricity and heating are working;
  • ensuring appliances provided are installed and maintained safely;
  • treating potentially health-threatening issues such as rising damp;
  • maintaining the structure and exterior of the house; plus
  • any other matter that is detailed in the tenancy agreement.

In addition, each state and territory has other safety requirements that must be met including building standards and fire safety standards.

The primary duty of the landlord is normally limited to:

  • defects that existed at the time the tenancy commenced or was renewed; and
  • defects of which the landlord knows or ought to have known that arose during the term of the tenancy.

A landlord or their agent can be found liable for tenant injury sustained at the rental property if the injury is the result of a dangerous condition or state of disrepair at the premises:

  • which had not been identified because the landlord or agent failed to conduct regular inspections; or
  • which they were warned of but failed to properly rectify within a reasonable time.

In order to meet their legal obligation to ensure that the property leased out by them is safe and habitable, a landlord or their PM should:

  • at the commencement of each tenancy or lease renewal, undertake an inspection to ensure that the premises are in a safe condition;
  • arrange for regular inspections to be conducted throughout the tenancy;
  • identify any repair or maintenance obligations which may be the responsibility of the tenant and request the tenant attend to these, and conduct a follow-up inspection to confirm they have been appropriately attended to;
  • perform/arrange for repairs promptly when required; and
  • ensure any works they undertake are done in a competent and professional manner/hire appropriately qualified tradies to perform the work.

It should be noted that the landlord will not generally be held liable for injuries that are caused by a defect, hazard or condition that they did not know about and could not have reasonably known about (see break-out)[2].

Landlords should check their liability cover, and particularly any exclusions, in their Landlord Insurance policy.

Property Manager Duty of Care
PMs manage their client’s obligations as a landlord. The main role is managing the landlord obligation under tenancy law and ensuring the client is aware of their rights and obligations. When managing a property on behalf of an owner, it is important for the managing agent (as part of its obligation) to assume the responsibility for inspections and to notify the landlord of any repairs which are the landlord’s responsibility.

Although there is generally no contract between agent and lessee (there is a contractual relationship between agent and lessor, i.e. the management agency agreement, and a contractual relationship between lessor and lessee, i.e. the lease), the PM still has a duty of care to tenants. The law of tort is concerned with breaches of duties and those duties are not established by any agreement or contract between persons but rather by the law itself. Negligence in respect to tenants refers to the agency’s failure to take reasonable care to avoid a reasonable foreseeability of harm to a tenant.

Whenever a PM is engaged in an act which he or she can reasonably foresee would be likely to injure another person, the PM has a duty of care to that other person – and if the PM is negligent in their duty, the tenant can sue the agent for compensation.

In this respect, PMs need to be cautious about encouraging tenants to engage in activities where there is a foreseeable risk of injury. For example, providing tenants with a vacating cleaning checklist that recommends cleaning drains with caustic soda. Or allowing special clauses to be inserted into leases that require the tenants to undertake activities such as cleaning out gutters.

Agents should also ensure they are adequately covered for liability with appropriate Professional Indemnity insurance.

Tenant Duty of Care
Tenants also have a duty of care when it comes to safety at the property. If their action or inaction leads to damage or another person being injured on the premises, they can be held liable. Tenants should therefore ensure they have legal liability cover. TenantCover provides up to $10 million in legal liability if the policyholder is found to be legally responsible for damage or personal injury to a third party or their property.

Tenants should also advise the PM or landlord if there is a defect at the property that they feel is unsafe or could cause an injury. If the tenant fails to give notice of a hazard, and it does cause an injury, they may not be able to claim compensation (see break-out).

Remember, landlords and their agents are legally responsible for ensuring that the property they rent out is safe. Property owners and PMs need to know what their legal obligations are in their state/territory and ensure they comply with their duty of care, as failure to do so could void insurance policies.

[1] ‘Tort’ from the Latin meaning crooked or wrong. A tort is a civil wrong, otherwise known as ‘negligence’. Put simply, a tort is a wrong that is based on a breach of duty of care. The breach gives a person a civil right of action for a remedy, i.e. compensation.

[2]Getting into a lather over duty of care

A recent case before the Supreme Court, where the ruling about who was responsible for maintaining the shower recess, has implications for landlords, agents, tenants and insurers.

Taylor vs Fisher involved a $1,700 per week three-bedroom house in South Hedland (WA). The tenant (Taylor) suffered a deep laceration and severed the ulnar nerve in her left elbow on the sharp edges of a damaged ceramic soap dish.

Proceedings in the District Court were started by the tenant who claimed damages of $200,000 plus $23,060 special damages from the landlord (Fisher). Counsel for the tenant asserted that the soap dish posed a reasonably foreseeable risk of harm and that the landlord had failed to take reasonable steps to avert that foreseeable risk.

Taylor’s claim was rejected and she took the matter to the Court of Appeal.

Three Supreme Court judges confirmed that the landlord was not at fault – as he had no knowledge of any problem with the soap dish.

The Court of Appeal found a reasonable person in his position would reasonably expect that if any problem did arise, the tenants in the house would notice it and ask him to repair the soap dish.

The trial judge found that the soap dish became dangerous to users of the shower no earlier than about a week before Ms Taylor suffered her injury and that no users of the shower were aware of the deterioration of the soap dish until Taylor was injured. As a result, none of the tenants notified the landlord of the issue.

The decision highlights that the duty of a landlord is limited to taking reasonable care to avoid foreseeable risk of injury from defects, of which they are on notice.