I can't comment on the "legalities" involved but what caught my eye was this.........:
"The PM's arguments were:
1. The Internet problems were Telstra's......."
And.......:
"The connection was a wireless connection to the whole house, shared by all tenants.
The PM acknowledges that the problem had been in existance for some time- but states that a lot of money was spent by the landlord in trying to resolve the problem, which turned out to be a Telstra fault."
There is only one true fully wireless internet "system" and apart from a small "modem" or in the case of a laptop, a "card" attached to the 'puter and either would have a stubby little antenna attached, this has no other physical connection as the "modem/card" communicates directly through the mobile network. Now,
if this was the "system" the landlord provided, depending on how long ago the contract with Telstra was established, it could have been on the now defunct CDMA network which was a relatively reliable service OR it could have been with the new "Next G" network (CDMA users were "forced" to change to "Next G" ) which has been overly problematic since it's inception regardless of what Telstra say publically.
Could the landlord have some form of networking installed for this system allowing multiple users in the premises.........maybe but I was under the impression that it wasn't overly recommended on full wireless.
The alternative to full wireless is your normal ADSL connection (refered to by Perchy) where a suitable modem is connected to a phone socket and a wireless network is established within the premises for multiple computers to "talk to" the modem.
Many, many consumers mistake the ADSL wireless network system for the true wireless system.
What I don't understand is.......why, if there had been a "long term" problem with the internet connection from the premises, the landlord spent "a lot of money" trying to rectify the problem when surely the first thing would be to discuss the issues with Telstra as chances are it's equipment supplied by them that's installed in the premises and in this case the problems would have been easily identified and resolved. If the problem is/was a Telstra issue then the same thing kind of applies......it should or could have been sorted out fairly quickly. Telstra have "service guarantees" which means they have to respond to a fault report within 48 hours, HOWEVER......with the internet, you are dealing with Bigpond (not Telstra) and they may have different conditions.
I can't help but think that regardless of the end cause of the problem, the PM, who as agent for the LL should have reported and followed it up until it was resolved, is telling "porkies"....... as it has a decidely fishy odour as you have told it.
I have had lengthy experience with Bigpond's "full wireless" and ADSL "wireless network" systems and little that the PM has said rings true and SWMBO (like Perchy) has recently become redundant after 7 years as a Telstra faults consultant. I think there's enough reason if you're so inclined, to push the PM a little.