AMC Realty Pty Limited v Cui

1. The tenant entered into the tenancy agreement as an overseas tertiary student requiring accommodation in Sydney near the university.
2. The landlord's representative at the hearing of the appeal (Mr Cai) confirmed that the name for the landlord on the Residential Tenancy Agreement, which is AMC Realty Pty Limited, is the legal owner of the premises and Mr Cai was an employee of AMC Realty Pty Limited.
3. The leased premises was a unit; the weekly rent was $1150 per week; the term of the tenancy agreement was 52 weeks commencing on 27 February 2024 and ending on 24 February 2025.
4. A rental bond of 4 weeks rent in the sum of $4600 was paid by the tenant under the terms of the Residential Tenancy Agreement and the bond was lodged at Rental Bond Services with number T774558-0.
5. The parties also signed a 1 page document called a Furniture Rental Agreement on 15 February 2024 (Furniture Rental Agreement).
6. The Furniture Rental Agreement required the tenant to pay a separate bond of $3000 (Furniture Bond).
7. The Furniture Rental Agreement stated that it would be for 52 weeks starting on 27 February 2024 and ending on 24 February 2025.
8. The Furniture Rental Agreement provided:

"The tenant QI CUI need to pay the Furniture's Bonds $3000 to AMC REALTY PTY LTD."

1. Clause 1 of the Furniture Rental Agreement provided:

"When, the Tenancy Agreement end, if the Furniture don't have any damaged, we will refund the full bonds; if have damaged, the Tenants need to repair it."

1. Clause 2 of the Furniture Rental Agreement provided:

"If, the Lease is terminated early in the fixed Tenancy Agreement, the deposit will not be refunded."

1. Clause 3 of the Furniture Rental Agreement provided:

"After the first year of the Tenancy Agreement ends and renew the Lease, if the Tenant fails to complete the Tenancy agreement and terminates the Tenancy Agreement in advance, if the Furniture if not damaged, the deposit will be fully refunded."

1. The Furniture Rental Agreement provided details of the landlord's bank account noting "Bonds: $3000.00".
2. There was no issue that the tenant paid the Furniture Bond directly to the landlord.
3. The tenant vacated early in breach of the Residential Tenancy Agreement.
4. The landlord filed Tribunal application 2024/230797 on 23 June 2024 for an order for the break fee and the bond of $4600.
5. The tenant filed Tribunal application 2024/269024 on 22 July 2024 for an order for a refund of the Furniture Bond of $3000.
6. The hearing took place on 11 October 2024 and the Decision was published to the parties on 11 October 2024. There were 2 orders:

(1) Order 1 - The landlord to pay the tenant $3379.66 by 25 October 2024;

(2) Order 2 - The whole of the rental bond ($4600) lodged at Rental Bond Services plus any interest, to be paid to the landlord.

1. As part of the findings set out in the Decision, the Tribunal ordered that the landlord was liable to repay to the tenant the Furniture Bond of $3000. It is this part of the Decision and therefore the calculation of the money order in Order 1 that is the subject of the appeal.
2. The parties confirmed at the hearing of the appeal that there was no dispute in relation to Order 2.

1. The landlord lodged the Notice of Appeal on 22 October 2024. It was filed within the 14 day prescribed period (cl 25(4) of the Civil and Administrative Tribunal Rules 2014 (NSW)).
2. In the Notice of Appeal, the landlord contended:

(1) that the Tribunal erred by finding that the landlord was in breach of s 32 of the RT Act as the Furniture Rental Agreement was not a collateral contract of the tenancy agreement, but a separate agreement;

(2) that the Tribunal erred by finding that the Furniture Rental Agreement was an unfair agreement and made in breach of ss 23 and 24 of the Australian Consumer Law;

(3) that the Tribunal should have upheld the term of the Furniture Rental Agreement that if the tenancy agreement was terminated before the expiry of the fixed term, then the Furniture Bond of $3000 would not be refunded to the tenant.

1. At a callover hearing on 1 November 2024 directions were made in the Appeal for the parties to file and serve documents and submissions.
2. In addition to the Notice of Appeal the appellant filed a submission dated 20 December 2024.
3. The tenant filed a Reply to the Appeal on 30 October 2024 and a further submission on 10 January 2024.
4. Neither party provided a transcript of the hearing.

1. An appeal to the Appeal Panel does not provide an unsuccessful party in the Tribunal below with the opportunity to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].
2. There is a right of appeal on a question of law and otherwise with the leave of the Appeal Panel: s 80(2)(b) of the NCAT Act.
3. In Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 at [24]- [40], the Appeal Panel set out the principles concerning questions of law within s 80 of the NCAT Act. An appellant is required to identify a pure question of law which then becomes the subject matter of the appeal.
4. The circumstances in which the Appeal Panel may grant leave to appeal from a decision made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act. The Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice because:

(1) the decision of the Tribunal under appeal was not fair and equitable; or

(2) the decision of the Tribunal under appeal was against the weight of evidence; or

(3) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. The principles governing an application for leave to appeal under the NCAT Act are well-established and repeated in many decisions of the Appeal Panel, often quoting Collins v Urban [2014] NSWCATAP 17. In Collins v Urban, the Appeal Panel stated, at [76], that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where:

"... there was a 'significant possibility' or a 'chance which was fairly open' that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance."

"[77] As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that:

(1) If there has been a denial of procedural fairness the decision under appeal can be said to have been 'not fair and equitable' - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12].

(2) The decision under appeal can be said to be 'against the weight of evidence' (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153].

[78] If in either of those circumstances the appellant may have been deprived of a 'significant possibility' or a 'chance which was fairly open' that a different and more favourable result would have been achieved then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the decision was against the weight of the evidence."

1. Even if an appellant from a decision of the Consumer and Commercial Division requiring leave to appeal has satisfied the requirements of cl 12(1) of Sch 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act. The appellant must demonstrate something more than the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32].
2. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve:

(1) Issues of principles;

(2) Questions of public importance or matters of administration or policy which might have general application;

(3) An injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;

(4) A factual error that was unreasonable arrived at and clearly mistaken; or

(5) The Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.

(1) The tenant was an overseas student with no history of renting. She inspected the property by video when she was still overseas and was satisfied with the premises so signed an unfurnished rental contract with the landlord on 15 February 2024;

(2) As the landlord would not agree to the tenant's request for a 6 month tenancy, a 52 week tenancy was eventually agreed to;

(3) As the tenant lived overseas at the time of negotiating the tenancy agreement, she asked the landlord to provide furniture;

(4) There were 2 separate agreements - the Residential Tenancy Agreement and the Furniture Rental Agreement, which Mr Cai contended was not collateral to the Residential Tenancy Agreement;

(5) The only reason why a Furniture Rental Agreement was entered into was because the tenant had asked for the landlord to provide furniture;

(6) The Furniture Rental Agreement was a separate service which the landlord often provides to international tenants to help them settle in;

(7) The Furniture Rental Agreement is not an unfair contract under the Australian Consumer Law - rather it would be unfair to the landlord not to enforce it;

(8) The furniture for this tenancy cost about $8000 and the landlord would be left with a substantial risk and loss if the tenant vacated early;

(9) The Furniture Bond was the only way the landlord could protect itself from the risk and loss of a tenant vacating early;

(10) The tenant broke the fixed term of the Residential Tenancy Agreement and was liable for a break fee for that agreement. However, unless the tenant was also required to pay the Furniture Bond, the tenant would not have to bear any responsibility by way of compensation under the Furniture Rental Agreement, which was unfair to the landlord;

(11) NSW Fair Trading sought to investigate the matter by email dated 28 June 2024, pursuant to which the landlord provided two copies of the Furniture Rental Agreement to NSW Fair Trading. After that, NSW Fair Trading did not conduct any further investigation which the landlord submitted meant that the two agreements were different and the landlord had not breached the RT Act.

1. At the hearing, Mr Cai contended that the two agreements were not related at all including for the reason that one was made by the landlord and one by the agent, and so they could never have been collateral. When we asked Mr Cai about the name of the Landlord on both agreements, Mr Cai confirmed that the Landlord was in fact the same entity and that he acted on behalf of the Landlord.
2. When we asked him about the basis of his appeal, Mr Cai conceded that really his complaint was that the Tribunal did not find in favour of the landlord and that the decision was not fair to the Landlord particularly as, apparently, the practice of requiring a separate furniture rental agreement and separate bond was a practice consistently adopted by the Landlord.
3. In summary, the tenant submitted:

(1) The tenant agreed with the Decision;

(2) She did not ask the landlord for the furniture to be purchased;

(3) In a text message dated 3 February 2024, she was offered a rental quote of $950 per week which did not include furniture or $1050 per week which included furniture;

(4) The tenant accepted the rental amount with furniture of $1050 per week and this is the amount referred to in the Residential Tenancy Agreement;

(5) The tenant did not understand that the Furniture Bond would not be refunded if she ended the tenancy early;

(6) Most of the furniture which was provided with the leased premises was second-hand and not clean.

1. In this section we set out the relevant provisions of the RT Act.
2. Section 160(1) of the RT Act provides:

Other security may not be required

(1) A landlord, landlord's agent or any other person must not require or receive from a tenant or another person anything other than a rental bond as security for any failure by a tenant to comply with the terms of a residential tenancy agreement.

Maximum penalty--20 penalty units.

Standard residential tenancy agreements

(1) Standard form may be prescribed The regulations may prescribe a standard form of residential tenancy agreement.

(2) The regulations may provide for the following--

(a) the terms of the agreement,

(b) more than one standard form of residential tenancy agreement for use for different classes of residential premises, agreements or parties,

(c) the addition of clauses to, or the omission or variation of terms contained in, a standard form of residential tenancy agreement in specified circumstances,

(d) the application of terms of standard forms of residential tenancy agreement to agreements entered into before the regulations prescribing those standard forms took effect.

(3) Terms to be consistent with Act A standard form of residential tenancy agreement must be consistent with this Act and the regulations.

(4) Variation of standard form A residential tenancy agreement for which a standard form is prescribed may include additional terms, but only if--

(a) the terms do not contravene this Act or the regulations or any other Act, and

(b) the terms are not inconsistent with the terms set out in the standard form.

(5) Residential tenancy agreement taken to include standard terms A residential tenancy agreement of a kind for which a standard form is prescribed is taken to include the terms of the standard form.

(6) This section is subject to this Act.

19 Prohibited terms

(1) A residential tenancy agreement must not contain a term of a kind set out in this section or prescribed by the regulations for the purposes of this section.

(2) Terms having the following effects must not be included in residential tenancy agreement -

(a) that the tenant must have the carpet professionally cleaned, or pay the cost of such cleaning, at the end of the tenancy,

(b) that the tenant must take out a specified, or any, form of insurance,

(c) exempting the landlord from liability for any act or omission by the landlord, the landlord's agent or any person acting on behalf of the landlord or landlord's agent,

(d) that, if the tenant breaches the agreement, the tenant is liable to pay all or any part of the remaining rent under the agreement, increased rent, a penalty or liquidated damages,

(e) that, if the tenant does not breach the agreement, the rent is or may be reduced or the tenant is to be or may be paid a rebate of rent or other benefit.

Note**:** Section 15 also prohibits certain additional terms from being included in a residential tenancy agreement for which a standard form is prescribed.

Kinds of payments that tenant may be required to pay for residential tenancy agreement

A person must not require or receive from a tenant any payment for or in relation to renewing, extending or continuing a residential tenancy agreement, other than the following--

(a) rent,

(b) a rental bond,

(c) any other amounts or fees prescribed by the regulations.

Maximum penalty--20 penalty units.

1. It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided on the appeal and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal: see Cominos v Di Rico [2016] NSWCATAP 5 at [13]. We have followed that principle in this case.
2. As we understand the contents of the Notice of Appeal and submissions, the basis upon which the landlord brought the appeal was that the Tribunal erred by finding that the terms of the Furniture Rental Agreement were a breach of s 32 of the RT Act and/or a breach of ss 23 and 24 of the Australian Consumer Law. We note the Australian Consumer Law (the ACL) is law in NSW by virtue of s 28 of the Fair Trading Act 1987 (NSW).
3. In our view, neither the Notice of Appeal nor the written submissions nor oral submissions made at the hearing, identify a question of law. Rather, the landlord's appeal amounted to a challenge to the findings of the Tribunal below.
4. It follows that the landlord requires leave to appeal on at least one of the three limbs in cl 12(1) Sch 4 of the NCAT Act.
5. In the Notice of Appeal the landlord set out its contentions under the first limb - namely, that the decision was not fair and equitable. This limb would usually involve a matter which is relevant to the way in which the hearing was conducted. In the absence of a transcript from the hearing before the Tribunal below (as directed), we cannot assess how the hearing was conducted or determine whether the hearing was fair and equitable. We also note that no submission was made by the landlord that there was a failure to afford procedural fairness at the hearing or that there was some other issue with the conduct of the hearing: Sengos v Hassan [2022] NSWCATAP 366 at [42]. Consequently, the landlord has not established that leave to appeal should be granted on the basis that the decision was not fair and equitable.
6. The balance of the matters on which leave to appeal is sought do not fall within the third limb of cl 12(1) Sch 4 which relates to significant new evidence. Rather, the balance of the landlord's leave to appeal application falls within the second limb of cl 12(1) Sch 4, namely that the decision was against the weight of evidence.
7. There was no issue that there was a fixed term of 52 weeks in the Residential Tenancy Agreement and that the tenant vacated after 4 months, which was part way through the fixed term of 52 weeks. As such there was no dispute that there was a breach of the Residential Tenancy Agreement by the tenant. The landlord had not consented to early termination and as we understand the facts, no notice of termination had been issued which led to the tenant vacating.
8. It follows that the tenancy ended by way of abandonment under s 81(4)(d) of the RT Act. There was no dispute about that and the rental bond was applied to the break fee.
9. The issue was whether the tenant was also liable to pay the Furniture Bond or whether this was an inconsistent term under s 15 of the RT Act and therefore void under s 21(1)(a) of the RT Act or the ACL.
10. The landlord submitted that the Tribunal erred by finding that the Furniture Rental Agreement was a collateral agreement and that the Tribunal should have found from the evidence before it that they were 2 separate agreements and the Furniture Rental Agreement was not subject to the law of the RT Act. In respect of the ACL, all that was challenged by the landlord was, in effect, that the Tribunal did not find that it was unfair to the landlord in the circumstances not to be able to keep the bond.
11. In particular the landlord relied on the following evidence:

(1) The provision of furniture with a rental property is a separate service provided by the landlord;

(2) The tenant specifically asked for the furniture to be supplied by the landlord;

(3) The parties signed 2 different agreements - one for the leased premises and a separate agreement for the furniture;

(4) It was reasonable for the landlord to seek a separate bond for the furniture if the tenancy agreement was going to terminate early as the landlord would suffer a loss having bought the furniture for this tenancy;

1. We are not satisfied that the Decision was against the weight of evidence. Specifically, the following evidence was before the Tribunal:

(1) The 2 agreements have the same parties;

(2) The 2 agreements were signed on the same date;

(3) The period of the 2 agreements is the same - 52 weeks commencing on 27 February 2024 and ending on 24 February 2025;

(4) The obligations on the tenant in one agreement are related to the obligations under the other;

(5) The Furniture Rental Agreement refers to a breach of the Residential Tenancy Agreement in so far as the tenancy is terminated early, will result in the Furniture Bond not being refunded.

1. The landlord did not provide a satisfactory response to the Appeal Panel as to why the three clauses in the Furniture Rental Agreement were not included in the Residential Tenancies Agreement as additional clauses, which the standard terms of the Residential Tenancy Agreement facilitate (page 14 of 17 of the agreement).
2. We consider that it was open on the above evidence for the Tribunal to find that the Furniture Rental Agreement was collateral to the Residential Tenancy Agreement.
3. Section 32 sets out the kinds of payments that a tenant may be required to pay for a residential tenancy agreement. It does not refer to a furniture bond and as such we agree with the Tribunal's finding that the requirement of a furniture bond was a breach of s 32 of the RT Act.
4. Section 16 prescribes that a landlord may only require a rental bond as security for the failure by the tenant to comply with the terms of the tenancy agreement. By the Furniture Rental Agreement providing that if the tenant terminated the tenancy agreement early, the Furniture Bond would be forfeited, the Furniture Bond was in effect a form of security for the failure to comply with the term of 52 weeks, and as such was sought by the landlord in breach of s 16 of the RT Act.
5. As the Furniture Bond was to secure the tenant's obligations to comply with the 52 week term and there was no issue that the furniture had not been damaged, we consider that the Furniture Bond was in effect a form of penalty/liquidated damages in breach of s 19(1)(d) of the RT Act.
6. Tenancy agreements are regulated contracts under the RT Act. If the Tribunal had found that cl 2 of the Furniture Rental Agreement was not collateral to the Residential Tenancy Agreement and had upheld its terms which were inconsistent with the RT Act, we consider the effect would have been to facilitate the landlord circumventing the provisions of the RT Act.
7. We do not need to make any determination in relation to the ACL ground as we are satisfied that the decision under the RT Act was correct. In any event, as noted above, the landlord did not advance any arguments of substance concerning the ACL other than that the decision (in the result) was unfair to the landlord and not the tenant. The landlord did not articulate any question of law in respect of the ACL, nor did the landlord demonstrate any basis for why leave to appeal should be granted.
8. For these reasons we are not satisfied that the Decision was against the weight of evidence and this basis for leave to appeal is refused

(1) Leave to appeal is refused.

(2) The appeal is dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.