Atcheson v Knight

NCAT Appeal Panel|2018-05-02

reasons for decision

The appeal involves a residential tenancy dispute. The appellant is the former tenant. The respondent is the former landlord. The residential premises was a Lot in a strata scheme located in Cremorne Point, NSW. The residential tenancy agreement commenced in October 2013 with the execution of a written residential tenancy agreement, and ended in September 2017. The bond amount was $2,620.
In these reasons, reference to "the tenant" is reference to the appellant; and reference to "the landlord" is reference to the respondent.
The residential premises were self-managed by the landlord. There is a family connection between the parties in regard to a child of the tenant.
The parties fell into dispute about issues including the condition of the property at the end of the tenancy, and the condition of the property during the tenancy. On 23 October 2017 in matter RT 17/45186, the landlord commenced proceedings in the Tribunal seeking an order for compensation under s 187 of the Residential Tenancies Act 2010 ('the RT Act'). The bond had been paid to the landlord in full by NSW Fair Trading Rental Bond Services.
On 15 November 2017, in matter RT 17/48556, the tenant commenced proceedings seeking, relevantly, an order that the landlord pay compensation under s 187 of the RT Act due to failure to repair the premises in respect of "rising damp" and an order under s 175 of the RT Act that the bond be refunded to the tenant in full.
On 12 December 2017 the tenant's proceedings in matter RT 17/48556 was dismissed on the basis that the tenant failed to appear at the Group List and Conciliation hearing. The tenant asserts in this appeal that she was unaware that matter RT 17/48556 had been listed for a Group List and Conciliation hearing, or that the proceedings had been dismissed. The tenant has made no application to re-instate Matter RT 17/48556 under s 55(2) of the Civil and Administrative Tribunal Act 2013 ('the NCAT Act'). The only proceedings relevant to this internal appeal which the Appeal Panel has jurisdiction to deal with is the landlord's claim in matter RT 17/45186.

Grounds of Appeal

The grounds of appeal are not clearly articulated. However, in considering appeals from self-represented litigants, the Appeal Panel is to consider grounds of appeal generally, subject to any procedural fairness issues arising from any failure to clearly articulate grounds of appeal (Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12] 'Prendergast'). Prendergast also summarises errors which constitute errors of law (at [11]-[21])
We interpret the grounds of appeal raised by the tenant as: 1. Considering the landlord's claim for rent arrears, when it was not clear that it was part of the proceedings. 2. Refusing to consider the documentary evidence of the tenant, and allow the tenant to call witnesses at the hearing in circumstances where then tenant had not filed and served documentary evidence in accordance with Tribunal directions. 3. In respect of damage to floorboards, an incorrect application of legal principles because no deduction for the depreciated loss of value of the floorboards was taken into account. 4. The decision being not fair and equitable because evidence in support of the tenant was not admitted.

Jurisdiction

Under s 80 of the NCAT Act, a party may appeal from an error of law as a matter of right. In respect of errors other than errors of law, the appellant must satisfy the Appeal Panel that leave to appeal should be granted under cl 12 Schedule 4 of the NCAT Act on the basis that a "substantial miscarriage of justice" had occurred 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).
The principles as regarding whether or not leave to appeal should be granted under cl 12 Schedule 4 of the NCAT Act were set out by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 at [76]-[84].
In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: "... [T]here 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."
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, 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.
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 principle; 2. questions of public importance or matters of administration or policy which might have general application; or 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 unreasonably 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.
Even if an error of law is established, for an appeal to succeed the Appeal Panel must be satisfied that the error had a material affect on the decision, and that it would not be inevitable that the same decision would be made in any event if the correct law was applied: Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 14
The time to lodge an internal appeal from a decision involving a residential tenancies matter is 14 days from the date the party was notified of the decision or given reasons for the decision (whichever is the latter): Cl 25 (4) (b) Civil and Administrative Rules 2014. However, the Appeal Panel may extend the period to file an appeal under s 41 of the NCAT Act. The applicable principles as to whether or not an extension should be granted are set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [22].
The tenant submitted that she had only received the decision and reasons in the post on or about 13 February 2018. In any event, it is unnecessary for the Appeal Panel to further consider the issue of whether or not the appeal was filed in time, and if not, whether it should exercise its discretion to extend the time period, because we are not satisfied the tenant has established any error of law in the decision, or that leave should be granted to appeal on any error other than an error of law.

Consideration of the Landlord's Claim for Rent Arrears

The tenant submitted that she was taken by surprise by the landlord's claim for rent arrears, because: 1. she did not understand it was part of the landlord's claim in the proceedings; 2. the landlord had apparently conceded at the Group List and Conciliation hearing that there were no outstanding rent arrears exceeding the bond amount (the landlord's application in matter RT 17/45186 as filed stating that there were rent arrears at the date of vacant possession of $2257 and the bond amount was $2620; and 3. the landlord's rent ledger was inaccurate; and (iv) the tenant's bank records could prove that the landlord's claim for rent arrears were erroneous.
The landlord submitted that there was no surprise to the claim for rent arrears. According to the landlord, he reviewed his records after the Group List and Conciliation hearing, and calculated a larger amount of rent arrears. The landlord stated that he had made it clear in the documents he had filed and served in accordance with Tribunal directions prior to the hearing that he was claiming rent arrears as part of the proceedings. The landlord submitted that his records were correct, and the tenant had provided no evidence to dispute that she was not in rent arrears to the landlord.
In respect of the claim for rent arrears, the Senior Member stated at the beginning of his reasons that the landlord claimed that the tenant was $3,434.00 in rent arrears at the end of the tenancy. The Senior Member found on the issue of rent arrears: "In regard to the rental arrears, although the respondent submitted that there were errors in the rent ledger in that she claimed to have paid rent up until 3 weeks before vacation, she did not provide any evidence in the form of bank statements to support that claim, although she stated every rental payment was made by direct transfer, so such records would have been simple to obtain. I prefer the evidence of the applicants supported by the detailed and complete rental ledger and find that the respondent was $3,434 in rent arrears at the end of the tenancy. The bond has been paid to the landlords and applied to the rental arrears, leaving an outstanding amount of $814".
In the Appeal Panel hearing, the tenant filed and served a bundle of documents. According to the tenant, some of the documents were documents she had attempted to tender at the hearing before the Senior Member, and some were documents she had obtained subsequent to the hearing on 24 January 2018. One of the documents the tenant sough to rely upon at the Appeal Panel hearing was a list of rent payments. However, that list did not have any dates, nor was it cross referenced in any way to the rent ledger of the landlord. The tenant informed the Appeal Panel that she could obtain her bank records.
The Appeal Panel is at a disadvantage in respect of understanding what was actually said at the hearing on 24 January 2018 before the Senior Member, as the tenant had not provided a copy of the sound recording; nor a transcript; nor any sworn evidence of what was said.
However, from the written reasons of the Senior Member and the submissions of the tenant and the landlord, we are satisfied that the tenant was aware the landlord was making a claim in respect of rent arrears, and had a reasonable opportunity to obtain evidence and make submissions in that regard. Although the directions made on 15 November 2017 do not make it clear that the landlord was making a claim under s 187 of the RT Act for rent arrears, we are not satisfied that the tenant was taken by surprise by this aspect of the claim, having regard to the submission of the landlord that it was clearly referred to in the documents that were filed and served by the landlord prior to the hearing on 24 January 2018.
The reasons of the Senior Member do not make clear whether or not he formally granted leave to the landlord to amend the application. However, the Tribunal must exercise its powers in the context of the guiding principle of the Tribunal under s 36(1) of the NCAT Act for the just, quick, cheap and efficient resolution of the real issues in dispute, and act in a way to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject matter of the proceedings (s 36 (4) of the NCAT Act). Under s 38(4) of the NCAT Act, the Tribunal is to act with as little formality as the circumstances as the case permit, and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (s 38 (4) of the NCAT Act, but subject to applicable principles of procedural fairness and natural justice including the duty that the Tribunal give a party a reasonable opportunity to be heard and have their submissions taken into account under s 38 (5) of the NCAT Act).
The amount claimed by the landlord in rent arrears was, after deduction of the bond, $814. Had the Senior Member taken a strict legalistic approach and held that he would not consider the landlord's claim for rent arrears because it had not been clearly set out in the application filed, the inevitable outcome would have been that the landlord would have filed a fresh set of proceedings claiming rent arrears. This would have resulted in further time and expense to the parties and the Tribunal over an issue that could properly be dealt with at the hearing on 24 January 2018 and which involved an amount in dispute that was not a large amount of money.
In circumstances where the Senior Member was satisfied that the tenant was sufficiently on notice prior to the hearing that the landlord was claiming rent arrears and the tenant had a reasonable opportunity to file and serve evidence in response to such a claim prior to the hearing and failed to do so, we are not satisfied that the tenant has established any error of law by reason of the Senior Member considering the landlord's claim for rent arrears at the hearing on 24 January 2018. No denial of procedural fairness has been established, as there was no practical injustice to the tenant in all the circumstances by reason of the Tribunal considering and determining the issue of rent arrears at the hearing on 24 January 2018 (Re Minister for Immigration and Multicultural Affairs: Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 at [37] per Gleeson CJ).

Refusal to Consider the Evidence of the Tenant

When the matter had been listed for a special fixture hearing at the Group List and Conciliation hearing, the Tribunal had directed that the tenant file and serve all documentary evidence (including witness statements) by 13 December 2017. The tenant subsequently sought an extension to that timetable. An extension was granted to 22 January 2018 for her to file and serve documentary evidence.
The tenant did not file and serve documentary evidence in accordance with Tribunal directions. Rather, the tenant attended the hearing on 24 January 2017 with documents that had been filed the previous day, but not served on the landlord. The tenant's documents did not include any witness statements. The tenant attended the hearing with two witnesses, her father and a friend, Ms Farley.
The Senior Member refused to allow the tenant leave to call oral evidence from her father and Ms Farley on the basis that the landlord had no notice of the proposed evidence and it would be a denial of procedural fairness to allow the tenant to call evidence from witnesses in such circumstances.
However, the Senior Member, quite correctly, allowed the tenant to give oral evidence about all relevant issues, including the issues of rent arrears and the condition of the property at the beginning and end of the tenancy (which was relevant to the landlord's claim for compensation for the cost of repairs to the premises) and it is clear from the reasons given by the Senior Member that he considered the oral evidence and submissions of the tenant.
In respect of the documentary evidence that the tenant had sought to tender, the Senior Member stated: "The respondent's evidence, following a very brief glance by me, appeared to relate mainly to a previous counter claim made by her in relation to allegations of a mould infestation in the unit. Mr Knight stated that Ms Atcheson actually lodged an application in that regard, but failed to appear. I have no knowledge of such an application, although I note that Ms Atcheson did not dispute Mr Knight's statement. However, I consider that the evidence in regard to the counter claim is not relevant to the facts and issues to be decided by me today. …given the lateness of the evidence and the fact that the applicants had not seen it at all, I order that the evidence of the respondent may not be admitted at the hearing today. I note that in addition that flicking through the evidence of the respondent, it was obvious that most of the evidence provided by her had been in the possession of the respondent for some months, including the various inspection reports apparently obtained for her counter claim. There was no explanation as to why that was not provided in accordance with Tribunal directions except that she was waiting for additional evidence, not described and in the end not provided. Allowing the respondent's evidence in today would in my opinion unfairly prejudice the applicants".
It is clear from the reasons of the Senior Member that most, if not all, of the documents that the tenant sought to rely upon were not relevant to the landlord's claim for rent arrears and end of tenancy repair costs. The documents may have been relevant to the tenant's claim for compensation due to an alleged failure of the landlord to keep the premises in a reasonable state of repair, but that claim had been dismissed on 12 December 2017 and the Senior Member correctly identified that he had no power to consider such a claim at the hearing on 24 January 2018.
We are not satisfied that there was any error of law in the Senior Member refusing to admit the late documents of the tenant, nor refusing to allow the tenant leave to call evidence from Ms Farley or her father.
There was no ground of appeal that clearly identified any error of law by reason of the Senior Member not granting an adjournment so that the tenant could file and serve documentary evidence. However, even if such a ground was identified, we are not satisfied that there was any proper basis to grant an adjournment of the landlord's claim against the tenant in any event, applying the principles set out in O'Neill v T and I Engines Pty Ltd [2015] NSWCATAP 77 at [22] and Boscolo v NSW Land and Housing Corporation [2017] NSWCATAP 210 at [54]-[58].

Compensation to Landlord for Damage to Floorboards

At the hearing on 24 January 2018, the landlord claimed $3,300 for the cost of treating timber floorboards due to stains, discolouration and marks on the floorboards. Such a claim was based upon breach of the tenant's obligation under s 51(3) (b) of the RT Act to leave the residential premises at the date of vacant possession "as nearly as possible in the same condition, fair wear and tear excepted, and, if there is a condition report, as set out in the condition report applicable to the premises when the agreement was entered into".
The Senior Member found that the stains and marks on the floor were beyond fair wear and tear and the "damage is so widespread that the only reasonable manner of repair is to have the entire floor treated". In respect of the cost of repairs, the Senior Member accepted the quotation that the landlord had provided from the company who had previously treated the timber floor in 2011. The reasons of the Senior Member explain why he rejected the evidence of the tenant that the marks were fair wear and tear or caused by rising damp; why the evidence of the landlord was accepted; and how quantum of damages was assessed.
The tenant asserts that there was no ingoing or outgoing inspection report. However, the absence of an ingoing or outgoing inspection report that complies with ss 29 and 30 of the RT Act does not mean that breach of s 51(3) (b) of the RT Act cannot be established; it is simply an issue relevant to the weight to be given to the evidence of the respective parties and other evidence such as photographic evidence is not to be disregarded: Hall v Hawkins [2015] NSWCATAP 197 at [59]-[66]. No error of law has been established in respect of the Senior Member's findings that s 51 (3) (b) of the RT Act had been breached by the tenant on the evidence provided by the parties at the hearing, notwithstanding the absence of ingoing and outgoing inspection reports.
The tenant submits that, in assessing damages, the Tribunal should have made a deduction for "depreciation". Although not clearly articulated, the tenant appears to be referring to the Australian Taxation Office depreciation schedule for fixtures and fittings of investment properties. No copy of the depreciation schedule was provided.
When assessing damages for breach of contract, the Tribunal must endeavour to put the party in the position it would have been had the breach not occurred. In the circumstances of this matter, the Senior Member awarded damages on the cost of "treating" the existing floor to restore it to the condition it should have been in (fair wear and tear excepted) at the end of the tenancy if the tenant had complied with s 51(3) (b) of the RT Act. The landlord was not put in a better financial position, but the same position he should have been in had the tenant complied with s 51(3) of the RT Act.
In residential tenancy disputes involving landlords and tenants, there may be situations where it is appropriate to consider the Australian Taxation Office depreciation schedule to consider what is the value of the damaged item in the process of determining what is the appropriate amount of damages to put the party in the position it should have been had the breach not occurred. Such a consideration may arise in circumstances where the landlord seeks to replace a fixture or fitting that naturally deteriorates with normal use over time and would require replacement in any event, such as carpet, with a new item. In such circumstances, it may not be appropriate to award the full cost of a landlord choosing to acquire a more valuable asset than that which had to be replaced, where for less expenditure the landlord could have acquired an asset as satisfactory as that replaced: Walker Group Constructions Pty Ltd v Tzanerous Investments Pty Ltd [2017] NSWCA 27 at [201]). However, each case depends upon its own facts.
No error of law has been established in respect of the manner in which the Senior Member assessed damages for the tenant's breach of s 51(3) (b) of the RT Act in the circumstances of this matter.

Conclusion-Error of Law

No error of law has been established by the tenant.

Error Other Than Error of Law

In respect of errors other than errors of law, the tenant must establish (i) that the error gives rise to a substantial miscarriage of justice on the grounds set out in cl 12 Schedule 4 of the NCAT Act; and (ii) leave to appeal should be granted.
We are not satisfied that any errors have been established that give rise to a substantial miscarriage of justice. We are not satisfied that the fresh evidence the tenant seeks to rely upon is significant evidence that was not reasonably available to the tenant at the time of the hearing on 24 January 2018; nor that the decision was not fair and equitable; nor that the decision was against the weight of evidence.

Conclusion-Error Other Than Error of Law

No errors have been established within cl 12 Schedule 4 of the NCAT Act.

Orders

The Appeal Panel makes the following orders: 1. Leave to appeal is refused; and 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. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 May 2018

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