Annette Shailer v Camille Serisier [2016] NSWCATAP 131 | Case summary

Claim for Rent Reduction

The Decision sets out in detail the factual background concerning the leaking of rainwater into the premises. The first incident occurred on 21 April 2015, and subsequent leaking occurred on 30 April, 18 June, 25 June, 7 July, 24 August, 8 September, 24 September, and 21 October, 2015. It is incontrovertible that the appellant was manifestly inconvenienced during each of these incidents, and subsequently when workmen attended to endeavour to remedy what appeared to be numerous defects in the overall residential premises of which the apartment formed one part.
The respondent's agent conceded that these incidents occurred and that the appellant was consequently inconvenienced. Nevertheless, the respondent, through her agent asserted that there was a period of 78 days out of the period of 210 days for which compensation was claimed in which no leaks had been reported. These periods were firstly between 1 May and 17 June 2015 and secondly between 27 July and 25 August 2015. However, we observe that this assertion takes no account of any time consequent upon the leaks which occurred immediately after each of these periods for rectification work to be carried out, and for the apartment to dry out. We shall return to this aspect later in these reasons for decision.
In the Decision under appeal, the Member first referred to the appellant's claim as focusing on a failure by the respondent to comply with her obligations under section 63(1) of the Act, to maintain the premises in a state of reasonable repair. The Member then noted under section 190 of the Act and clause 22(9) of the Residential Tenancies Regulation, 2010 ("the Regulation") that such a claim should be brought within three months of the appellant first becoming aware of the breach. Such a time limitation would have applied from 21 April 2015. However, the application was filed in the Tribunal on 1 December 2015, which the Member noted, was considerably out of time.
The Member then noted that the claim for rent reduction was brought under section 44(1) and for compensation under 187(1)(c) and (d) of the Act. Reference was then made to section 50(2) of the Act which, in effect, makes provision in every residential tenancy for a right of quiet enjoyment in favour of a tenant.
As we understand the reasons for decision, the Member was considering in broad terms all of the relevant provisions of the legislation as they applied to the various claims brought by the appellant which were the subject of the proceedings before the Tribunal. In general terms, the Member observed that all of these claims were founded upon an asserted breach by the respondent of her obligations under the tenancy and the fact that the legislative regime created a three months' time limit for the institution of proceedings before the Tribunal.
The Member then proceeded to consider whether the discretionary power to extend the time for filing the application which is contained within section 41 of the Civil and Administrative Tribunal Act, 2013 should be exercised. The Member noted that no application had been made by the appellant during the three month period because she had thought that on each of the many occasions on which repairs had been effected, presumably by the body corporate, that such repairs would have been effective to have rectified the problem. She received certain advice from a tenants' advisory service that, in any event, there appeared to be a continuing breach of the respondent's obligations so that the three month time period did not operate. The appellant wished to avoid, if possible, the "time and stress involved in coming to the Tribunal" as noted by the Member.
The Member determined not to extend the time. Firstly she noted that the appellant had made a "conscious decision" on about 21 July 2015 not to bring a claim, because she had been assured by the agent that the problem had been fixed. Secondly, the Member found that if the claim was backdated to 21 April 2015, the respondent: …would be considerably prejudiced as the claimed rent reduction for 7 months is much more significant. As the breach in effect continued the tenant was entitled to bring a claim for repairs at any time, which she also chose not to bring.
On this basis, the Member determined the claim for rent reduction and compensation by reference to the period commencing three months prior to the date of filing the application, on 1 September 2015.
The Member then found that there had been a breach by the respondent of the obligation to maintain the premises in a reasonable state of repair as required by section 63(1) of the Act. The Member declined to assess the impact of the continual leaks as extending to "90% of the leased area" being satisfied that "a large part of the living room was not affected and the kitchen was not affected. The bathroom was not affected either." The Member determined to reduce the rent by 25%.
The appellant contends that the Member was in error in applying a three month time limit, but has not challenged the assessment of 25% of the rent as representing an appropriate reduction.
In order to determine these proceedings, it is necessary to make reference to some of the provisions of the Act and the Regulation, and these provisions will also be relevant in determining the balance of the appeal proceedings. Before doing so, we should firstly observe that the Act sets out a number of provisions under which claims can be made by a tenant under a residential tenancy, not all of which are necessarily based on an established breach of a term of the lease. Such is the case with the provisions of section 44 of the Act, which is in the following terms: 44 Tenant's remedies for excessive rent (1) Excessive rent orders. The Tribunal may, on the application of a tenant, make any of the following orders: (a) an order that a rent increase under an existing or proposed residential tenancy agreement is excessive and that, from a specified day, the rent for residential premises must not exceed a specified amount, (b) an order that rent payable under an existing or proposed residential tenancy agreement is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises and that, from a specified day, the rent for residential premises must not exceed a specified amount. (2) Time limit for excessive rent increase applications. An application for an order that a rent increase is excessive must be made within the period prescribed by the regulations after notice of the increase is given. (3) Applications on withdrawal of goods or services A tenant may, before the end of a tenancy, make an application that the rent is excessive, having regard to the reduction or withdrawal of any goods, services or facilities provided with the residential premises, even if those goods, services or facilities were provided under a separate or a previous contract, agreement or arrangement. (4) Determination of excessive rent. For the purposes of making an order under this section, the Tribunal may declare that amounts payable under a contract, agreement or arrangement under which goods, services or facilities are provided to the tenant are rent. (5) The Tribunal may have regard to the following in determining whether a rent increase or rent is excessive: (a) the general market level of rents for comparable premises in the locality or a similar locality, (b) the landlord's outgoings under the residential tenancy agreement or proposed agreement, (c) any fittings, appliances or other goods, services or facilities provided with the residential premises, (d) the state of repair of the residential premises, (e) the accommodation and amenities provided in the residential premises, (f) any work done to the residential premises by or on behalf of the tenant, (g) when the last increase occurred, (h) any other matter it considers relevant (other than the income of the tenant or the tenant's ability to afford the rent increase or rent)
The other provisions of the legislation are: 50 Tenant's right to quiet enjoyment (1) A tenant is entitled to quiet enjoyment of the residential premises without interruption by the landlord or any person claiming by, through or under the landlord or having superior title (such as a head landlord) to that of the landlord. (2) A landlord or landlord's agent must not interfere with, or cause or permit any interference with, the reasonable peace, comfort or privacy of the tenant in using the residential premises. Maximum penalty: 10 penalty units (3) A landlord or landlord's agent must take all reasonable steps to ensure that the landlord's other neighbouring tenants do not interfere with the reasonable peace, comfort or privacy of the tenant in using the residential premises. (4) This section is a term of every residential tenancy agreement.
In the reasons for decision, the Member discussed the obligation of the respondent as landlord under section 50 in general terms, focusing on the words "reasonable peace, comfort or privacy". The Member concluded that the appellant had suffered a loss of the right of quiet enjoyment "being reasonable peace, comfort and privacy as a result of the leak regularly occurring over the tenancy." In coming to this conclusion, the Member said that: During the 7 month period of the regular leaking the tenant was concerned each time she was at work and it rained whether her personal items would be soaked; she had to regularly move furniture when she knew it was going to rain; she had to regularly clean up large puddles of water off the floor; she was regularly corresponding with the agent regarding the leaks; regularly having her premises inspected for the cause of the leak; listening to the sound of water running down the walls at night; was splashed with dripping water while sitting on the couch and was concerned that the leaks were causing mould, which was not a healthy environment to live in."
We observe that by the reason of subsection (4), a breach of the obligation to provide a right of quiet enjoyment constitutes a breach of this statutory term of the lease. 63 Landlord's general obligation (1) A landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. (2) A landlord's obligation to provide and maintain the residential premises in a reasonable state of repair applies even though the tenant had notice of the state of disrepair before entering into occupation of the residential premises. (3) A landlord is not in breach of the obligation to provide and maintain the residential premises in a reasonable state of repair if the state of disrepair is caused by the tenant's breach of this Part. (4) This section is a term of every residential tenancy agreement.
As with section 50, this provision also creates a statutory term inserted into every residential tenancy agreement. The Member was satisfied that, in all the circumstances, there had been a breach by the respondent of section 63(1), and there can be no controversy arising out of this finding.
Accordingly, it is arguable that the circumstances which pertain to the claim brought by the appellant in these proceedings may be considered by reference to any or all of the provisions of sections 44, 50 and 63 of the Act. However, the application of section 44 is not conditional upon, nor does it necessarily respond to a breach of any provision of the residential tenancy, and this will have profound effect on the application of a time limit for the making of an application for relief pursuant to section 44 before the Tribunal. As is clear from the provisions of subsection (3), such an application may be made before the end of the tenancy.
There are different time limit considerations for the bringing of a claim before the Tribunal applying to sections 50 and 63. In order to consider this matter, reference must be made to section 190 of the Act which is in the following terms: 190 Applications relating to breaches of residential tenancy agreements (1) A landlord or a tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations. (2) An application may be made: (a) during or after the end of a residential tenancy agreement, and (b) whether or not a termination notice has been given or a termination order made. (3) A landlord's agent may make an application on behalf of a landlord.
Section 190 invites attention to that part of Regulation 22 which is relevant, which we set out below: 22 Times for making applications to Tribunal: ss 44 (2), 83 (2) (a), 98 (4), 115 (3), 125 (3), 134 (3), 141 (2), 175 (3) and 190 (1) of Act (1) For the purposes of section 44 (2) of the Act, the prescribed period for making an application for an order that a rent increase is excessive is within 30 days after notice of the increase is given. …. (9) For the purposes of section 190 (1) of the Act, the prescribed period for making an application for an order in relation to a breach of a residential tenancy agreement or proposed agreement is within 3 months after the applicant becomes aware of the breach.
We observe for completeness that sub-regulation (1) is not applicable to these proceedings, because, as will be seen, the provisions of section 44(3) apply. However, by reason of sub-regulation (9), any claim made in relation to a breach must be made within three months after the applicant "becomes aware of the breach."
In broad terms, it is arguable that the appellant had the right to bring this aspect of her claim under any or all of sections 44, 50 and 63 of the Act. In the case of section 44, she was clearly in time. In the case of sections 50 and 63, prima facie the application had to be made after she became aware of the breach. Presumably, the breach could arguably be constituted as having occurred separately on each and every occasion that water penetrated the roof and caused damage, inconvenience, and the like. Alternatively, the breach might arguably be constituted as being a continuous course of conduct, namely a continuing failure to have properly repaired the roof. The impression we have from the limited information available to us is that the source of the leak may have changed over time as one fault was repaired and another fault became apparent. In all probability, nothing turns on this distinction because there was certainly a continuing ingress of water on a number of separate occasions over a long period of time.
Again, for completeness, we set out the provisions of section 187 of the Act which describes the nature and extent of the relief which may be afforded by the Tribunal in dealing with an application brought under the Act: 187 Orders that may be made by Tribunal (1) The Tribunal may, on application by a landlord or tenant or other person under this Act, or in any proceedings under this Act, make one or more of the following orders: (a) an order that restrains any action in breach of a residential tenancy agreement, (b) an order that requires an action in performance of a residential tenancy agreement, (c) an order for the payment of an amount of money, (d) an order as to compensation, (e) an order that a party to a residential tenancy agreement perform such work or take such other steps as the order specifies to remedy a breach of the agreement, (f) an order that requires payment of part or all of the rent payable under a residential tenancy agreement to the Tribunal until the whole or part of the agreement has been performed or any application for compensation has been determined, (g) an order that requires rent paid to the Tribunal to be paid towards the cost of remedying a breach of the residential tenancy agreement or towards the amount of any compensation, (h) an order directing a landlord, landlord's agent or tenant to comply with a requirement of this Act or the regulations, (i) a termination order or an order for the possession of premises, (j) an order directing a landlord or landlord's agent to give a former tenant or person authorised by a former tenant access to residential premises for the purpose of recovering goods of the former tenant or fixtures that the former tenant is entitled to remove. (2) Without limiting the Tribunal's power to make an order as to compensation, the Tribunal may order compensation to be paid for the following: (a) loss of rent, (b) any other breach of a residential tenancy agreement, (c) loss or damage suffered by a person as a result of inaccurate, ambiguous or out-of-date information being listed about the person on a residential tenancy database. (3) An order under subsection (1) (a) or (b) may be made even though it provides a remedy in the nature of an injunction or order for specific performance in circumstances in which such a remedy would not otherwise be available. (4) The Tribunal must not make an order for: (a) the payment of an amount that exceeds the amount (if any) prescribed by the regulations for the purposes of this section, or (b) the performance of work or the taking of steps the cost of which is likely to or will exceed the amount (if any) prescribed by the regulations for the purposes of this section.
We do not read section 187 of the Act as creating a substantive entitlement to bring a claim before the Tribunal; it is facilitative of consequential orders which may be made following upon a determination of an entitlement to bring an application before the Tribunal which is otherwise available under the Act or under any other legislative provision.
In circumstances where legislation creates an entitlement to bring an application before the Tribunal under more than one provision, it is sufficient for an applicant to establish an entitlement to relief under the terms of any one of those provisions, and for the Tribunal to grant such relief provided that such entitlement is established and is not otherwise unavailable by reason of any other provision of the legislation or for any other cause. Accordingly, it was appropriate for the Tribunal to consider this aspect of the claim under the provisions of section 44.
For the purpose of these proceedings, it is necessary to focus on the provisions of subsection (3). In general terms, it may be assumed that the factual circumstances as they pertain to these proceedings would constitute a reduction in the facilities provided within the residential premises, because of the inability to make full use of the bedroom area through the inconsiderable inconvenience caused by frequent leaking of rainwater, as described. Whilst the circumstances pertaining to a reduction in the facilities might also constitute a breach of the provisions of the lease, for reasons which we have given, it is not necessary to establish a breach when determining entitlement to bring a claim under section 44(3). In the circumstances, the time limit for making such a claim is that which is set out in the subsection itself, namely that the application to the Tribunal must be made before the end of the tenancy.
In circumstances where the claim was made by the appellant under section 44 of the Act, and was made within the time prescribed, it follows that the appellant is entitled to consideration of her claim by reference to the totality of the period during which there has been a reduction in the facilities provided, and that the Member was in error in determining otherwise.
It seems to us that in assessing the quantification of the order which we find should be made in favour of the appellant, with respect to this aspect of the claim, it is appropriate to accept the 25% reduction found by the Member. The appellant did not formally challenge this matter in the appeal proceedings, and the respondent did not formally bring any cross-appeal in the proceedings either generally or against this finding. However, it is necessary to determine whether the reduction in rent should apply to the totality of the period claimed by the appellant. We accept that the appellant did not notify the respondent either directly or through her agent about any complaints of leaking rainwater during the periods totalling 78 days to which we have earlier referred. However, some allowance should be made for the fact that the inconvenience suffered by the appellant would not have ceased immediately upon the cessation of the ingress of rainwater.
There is simply no evidence before us about this aspect of this matter, and on one view, the proceedings could be remitted for further hearing before the Member to determine whether and to what extent the inconvenience continued past the dates when the rainwater ceased entering the premises. In our opinion, it would be inappropriate to remit the proceedings to consider a matter which common sense dictates would involve a consideration of a few days' rental only, given the requirements of section 38 of the Civil and Administrative Tribunal Act that this Tribunal should determine all matters before it by acting: ..with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial matters of the case without regard to technicalities or legal forms.
Additionally, by reference to section 36 of the Act, we have an obligation "to facilitate the just, quick and cheap resolution of the real issues in the proceedings." We intend reducing the period of 78 days by 8 days to accommodate this additional period, as a matter of common sense in the context of the statutory regime which applies to the work of this Tribunal.
Accordingly, we uphold the appeal concerning this particular matter. The appellant is entitled to a reduction in rent of 25% for the period 21 April 2015 to 17 November 15 inclusive, less a period of 70 days. The period 21 April to 17 November 2015 is 211 days, leaving a net 141 days after deduction of 70 days.
Applying a 25% reduction in the 7 day weekly rental of $430 for a period of 141 days results in an entitlement to a reduction in rent of $2,165.

A claim for compensation for the period 21 April 2015 to 17 January 2015 for loss of quiet enjoyment in the amount of $3,000.

The appellant claimed the sum of $3,000 under this heading. This sum was accepted by the Member as being an appropriate sum for the totality of the period claimed, and for reasons which we have earlier described, the Member accepted that there was entitlement to maintain a claim under this heading. There is no cross-appeal by the respondent against this finding. In these circumstances, it would not, in our opinion, be appropriate to pursue a concern that the subject matter of this particular claim may involve some double counting of the nature and extent of the inconvenience and detriment suffered by the appellant from the multiple occurrences of the entry of rainwater into the apartment.
We are able to resolve this concern because we do not consider that in the aggregate the amount awarded by the Member for reduction in rent together with the claim for $3,000 for the total period claimed represents a result beyond the reasonable exercise of discretion in the context of all of the circumstances of these proceedings. The end result would not in our opinion justify any interference with the approach adopted by the Member, as already modified by us, but subject to one further important consideration, which we shall now discuss.
As we have previously indicated, the Member accepted that the sum of $3,000 was a reasonable amount to be awarded by way of compensation for lack of quiet enjoyment for the totality of the period claimed. However, the Member declined to exercise discretion to extend the time for the bringing of the claim pursuant to the provisions of section 41 of the Civil and Administrative Tribunal Act, which is in the following terms: 41 Extensions of time (1) The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation. (2) Such an application may be made even though the relevant period of time has expired.
We have previously set out the reasons why the Member determined not to extend the time for the bringing of the application beyond the three month period commencing when the appellant became aware of the breach. The first reason was that the appellant made a conscious decision on about 21 July 2015 not to bring a claim. The reason given by the appellant was that she had understood that the leak had been properly repaired, and that the problem had been fixed and would not re-occur. Furthermore, she understood, on the basis of advice given to her, that as the matter was of a continuing nature, time would not run. If the appellant was given that advice, it was clearly erroneous. However, there must be some sympathy for the position of the appellant in July 2015, because presumably she would not have brought a claim for compensation if the matter had been resolved at that stage.
The second reason given by the Member was that the respondent: …would be considerably prejudiced as the claimed rent reduction for 7 months is much more significant. As the breach in effect continued the tenant was entitled to bring a claim for repairs at any time, which she also chose not to bring.
We do not understand how this latter consideration would militate against the grant of an extension of time, because the respondent was continually informed through her agent of the continuing and regular problems encountered by the appellant, and had been given and, as we understand it, taken every opportunity to have the repairs effected. Furthermore, whilst the impact on the respondent landlord was obviously exacerbated by the ongoing exposure to a claim for compensation, so was the detriment suffered by the appellant. We do not see that the concentration on the disadvantage to the respondent is appropriate without also considering the circumstances of the appellant.
We readily appreciate that in granting this discretion to limit the time during which a tenant might make a claim for compensation, the legislature wished to limit the exposure of a landlord to a claim made late by a tenant. However, in our view, different considerations should apply to the exercise of the discretion to extend the period in circumstances such as the present ones, where there is a continuing pattern of breach, rather than an isolated episode. This is particularly so where, as here, the respondent landlord was at all times been kept fully informed of the difficulties being encountered by the appellant.
Whilst the concerns that we have expressed above might not, taken alone, have justified our interference with the exercise of the Member's discretion, there is one other matter which, in our opinion, tips the scale and leads us to conclude, that the Member's discretion miscarried in this instance. We reach this conclusion with the benefit of hindsight because of the determination which we have made concerning the appropriate time limit which applies to the claim for reduction of rent. The claim for loss of quiet enjoyment was based upon exactly the same circumstances which pertained to the claim for rent reduction under section 44. In these circumstances, the claim for loss of quiet enjoyment could have been, and in our view should have been, subsumed within the claim for reduction under section 44. This latter claim was brought within time. It follows that in the circumstances it would be unjust to deprive the appellant of the ability to bring both claims applying to the same period.
We reiterate that making two separate determinations arising out of essentially the same circumstances is not inappropriate in the context of these proceedings because no appeal was brought against the decision of the Member to proceed in this way, the parties obviously were content for the matter to be dealt with in this way before the Member, and the result in the aggregate is not unreasonable or inappropriate.
In these circumstances, we extend the time for the bringing of the claim under this head to the date upon which the application was filed in the tribunal namely 1 December 2015. Accordingly, we uphold the claim for compensation for $3,000 for loss of quiet enjoyment for the period claimed, save that for the reasons earlier advanced the period should be reduced by 70 days. The total period claimed from 21 April to 17 November 2015 is a period of 211 days, leaving a net balance of 141 days. The net reduction of the amount of the claim is $995, resulting in an entitlement by the appellant to payment of the sum of $2,005.

Annette Shailer v Camille Serisier

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Judgment (9 paragraphs)

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