Barrett v Lee

Background

1. The following background is uncontroversial.
2. The tenancy commenced on 29 September 2019.
3. It seems that email communications between the Tenants and the Landlord about the alleged impact of the Covid-19 pandemic on the financial circumstances of the Tenants commenced on or about 30 March 2019.
4. The Tenants ran their own corporate video production business. In their email sent on 30 March 2020 they said that their business had been hugely impacted by the pandemic with the majority of their scheduled work being cancelled over the past month.
5. At that time, the Tenants requested a 50% reduction in the weekly rental. From the beginning of April 2020, the Tenants paid only 50% of the rent.
6. Email correspondence between the Landlord and the Tenants about the requested reduction in rent and payment of the reduced rent took place over the period from 30 March 2020 to 1 July 2020. The Landlord did not agree to the payment of a reduced rent.
7. A moratorium on residential tenancy evictions for rental arrears where a tenant was impacted by Covid-19 was introduced in NSW on 15 April 2020.
8. On 14 May 2020 new provisions in sections 228A to 228C of the Residential Tenancies Act 2010 (RTA) concerning the impact of the Covid-19 pandemic commenced. These provisions included a new power conferred on the Tribunal to make a termination order in respect of a residential tenancy agreement on the application of tenants impacted by the pandemic: s 228C.
9. Section 228C (1) provides: 228C Termination by Tribunal on application by impacted tenants (1) The Tribunal may, on application by an impacted tenant, make a termination order if satisfied that, during the moratorium period - (a) the impacted tenant has, by written notice given to the landlord or landlord's agent, asked the landlord to participate in a formal rent negotiation process and the landlord - (i) has not responded to the notice within 7 days of the impacted tenant making the request, or (ii) has refused to participate in a formal rent negotiation process, or (iii) has agreed to participate in, but has subsequently failed to respond to or participate in the process, or (b) the landlord - (i) does not respond to notice of any part of the formal negotiation process given by NSW Fair Trading within 7 days of the giving of the notice, or (ii) fails to participate in, or stops participating in, the formal rent negotiation process, or (c) the impacted tenant and the landlord have participated in a formal rent negotiation process in good faith but are not able to reach an agreement that would avoid financial hardship for the impacted tenant because of - (i) the amount of rent that would be payable under an arrangement the landlord could agree to, or (ii) the amount of unpaid rent that has accrued, or will accrue, if the agreement is not terminated. (2) For the purposes of determining any of the matters stated in subsection (1), the Tribunal may have regard to the following - (a) any advice provided by NSW Fair Trading relating to the participation of the landlord or impacted tenant in the formal rent negotiation process, including whether the landlord or impacted tenant refused, or refused to make, a reasonable offer about rent, (b) whether the impacted tenant has continued to make any payments towards the rent, (c) the nature of any financial hardship experienced by the landlord or impacted tenant, including the general financial position of each party, (d) any special vulnerability of the impacted tenant, (e) any other matter the Tribunal considers relevant. (3) An impacted tenant may make an application under this section without giving the landlord a termination notice. (4) An impacted tenant must give a copy of the application to the landlord or landlord's agent. (5) If the Tribunal makes the termination order, the Tribunal may also order the impacted tenant pay compensation to the landlord of an amount of not more than 2 weeks rent.
10. An "impacted tenant" is defined in s 222A as: impacted tenant means a tenant who is a member of a household impacted by the COVID-19 pandemic.
11. A household impacted by the Covid-19 pandemic is defined in s 222B (1) as: (1) For the purposes of this Part, a household is impacted by the COVID-19 pandemic if - (a) any 1 or more rent-paying members of the household have - (i) lost employment or income as a result of the impact of the COVID-19 pandemic, or (ii) had a reduction in work hours or income as a result of the impact of the COVID-19 pandemic, or (iii) had to stop working, or materially reduce the member's work hours, because of - (A) the member's illness with COVID-19, or (B) another member of the household's illness with COVID-19, or (C) the member's carer responsibilities for a family member ill with COVID-19, and (b) as a result of any of the matters stated in paragraph (a), the weekly household income for the household has been reduced by at least 25% compared to the weekly household income for the household before the occurrence of any of the matters.
12. On 3 June 2020 the Tenants commenced proceedings in the Tribunal for an early termination of the residential tenancy agreement on the grounds of undue hardship (proceedings RT 20/24200): s 104 of the RTA.
13. The application which commenced these proceedings was served on the Landlord by the application being sent by the Tribunal to the Landlord's residential address - an address which was also the Landlord's address for service specified in the residential tenancy agreement: Rule 13 (2) (b) of the Civil and Administrative Tribunal Rules 2014.
14. From about the middle of March 2020, and at all material times thereafter, the Landlord was in the Philippines. This fact was unknown to the Tenants and to the Tribunal until after final orders were made in proceedings RT 20/24200. The email correspondence between the parties made no reference to this fact.
15. A Notice of hearing by telephone with directions, dated 5 June 2020, in proceedings RT 20/24200, was sent by post, by the Tribunal, to the Landlord's residential address. It gave notice of a hearing to be held on 23 July 2020. The notice also set out directions concerning the provision by each of the parties of any documents intended to be relied upon. These directions included that the Tenants were to give the Landlord any documents they intended to rely upon within 14 days of the date of the notice.
16. NSW Fair Trading sent one of the Tenants, by email, a letter dated 13 July 2020. The letter contained the heading "No agreed outcome on rent reduction". The letter thanked the addressee for participating in Fair Trading's dispute resolution service during the moratorium on residential tenancy evictions. It said that Fair Trading could not assist [the] parties to reach an agreement on the terms of rent reduction. The Landlord had been a party to email correspondence with NSW Fair Trading about this dispute.
17. A telephone hearing in proceedings RT 20/24200 took place on 23 July 2020. One of the Tenants appeared by telephone. There was no appearance by, or on behalf of, the Landlord. On that occasion orders were made that the hearing was adjourned to a date to be fixed and for the Tenants and Landlord to provide a copy of any further documents on which they intended to rely by 30 July 2020, the Tenants were ordered to provide a Financial Statement (Covid-19) and the Landlord was also permitted to provide such a statement. The matter was given an urgent hearing. Notice of those orders was sent by the Tribunal by post to the Landlord's residential address.
18. A Notice of contested hearing by telephone, dated 24 July 2020, was sent by post, by the Tribunal, to the Landlord's residential address. It gave notice of a hearing on 6 August 2020.
19. A telephone hearing took place on 6 August 2020. One of the Tenants appeared at that hearing. There was no appearance by, or on behalf of, the Landlord.

Orders in the original proceedings

1. At the hearing on 6 August 2020, the Tribunal made orders that the residential tenancy agreement was terminated in accordance with s 228C of the RTA as the household was impacted by the Covid-19 pandemic, the order for possession was suspended until 5 September 2020 and leave was granted to the Tenants to amend the claim pursuant to s 228C.
2. Oral reasons for decision were given at the hearing. No transcript or sound recording of the reasons was obtained by the Landlord for the purpose of his application to set aside the orders made on 6 August 2020 or for the purpose of this appeal.

The set aside application

1. By application dated 13 August 2020 the Landlord applied to set aside the Tribunal's decision made on 6 August 2020 pursuant to clause 9 of the Civil and Administrative Tribunal Regulation 2013 (Regulation).
2. Clause 9, relevantly, provides: 9 Additional power to set aside or vary decision determining proceedings (1) In addition to any power that is expressly conferred on the Tribunal by the Act or enabling legislation to set aside or vary its decisions, the Tribunal may order that a decision it has made that determines proceedings be set aside or varied in either of the following circumstances - (a) if all of the parties to the proceedings have consented to the making of the order to set aside or vary the decision, (b) if the decision was made in the absence of a party and the Tribunal is satisfied that the party's absence has resulted in the party's case not being adequately put to the Tribunal. (2) The Tribunal may make an order under this clause of its own motion or on the application of a party. (3) Unless the Tribunal grants an extension under section 41 of the Act, an application for an order under this clause must be made within 7 days after the decision concerned was made. (4) Except where the parties have consented to the making of the order, the Tribunal may not make an order under this clause unless the Tribunal has first - (a) afforded the parties an opportunity to make submissions about the proposed order, and (b) taken any such submissions into account.
3. Information about applying to set aside a decision made in the absence of a party was available on the NCAT website, to which the Landlord was referred in email correspondence with the Tribunal on 13 August 2020 before his application was lodged. That information included the following: Applications to set aside or vary a decision are usually decided "on the papers" without a hearing. You must provide as much information and documentation supporting your application as possible. NCAT may call for submissions from the other party before deciding the application.
4. The information on the website also included: Set aside or vary decision applications must be lodged within 7 days after the decision was made. If you apply outside the time limit, you can request a time extension as part of your application. NCAT will not always agree to a request for a time extension.
5. A hearing is not required for proceedings to set aside a decision under clause 9: Regulation 9 (8) of the Civil and Administrative Tribunal Regulation 2013 and s 50 (1) (d) of the Civil and Administrative Tribunal Act 2013 (NCAT Act).
6. The application form to set aside the decision completed by the Landlord, on the first page under the heading "Important Information", contained the following: This application may be determined on the papers, without an oral hearing. Provide as much information and documentation supporting your application as possible. Attach additional pages to this application if needed.
7. In the application form: 1. The Landlord gave his residential address as his postal address and added "I have no access to posted mail until I can return to Australia". 2. The Landlord specified that the ground of the application was that referred to in clause 9 (1) (b). 3. The Landlord provided the following in response to the request in Section E (i) of the application form for information in respect of the question "Why were you absent when the Tribunal made the decision?": I did not receive notice from NCAT, or applicants, of the application or of the hearing date because my return flight from the Philippines on May 9 2020 was cancelled due to Covid-19 and I was stranded in Manilla with my family on the relevant dates-see attached "Flight cancellation" email. I have had no access to any mail posted to my home address while I am overseas. Since May 2020 the Australian Government has permitted only 2 flights from Philippines to Australia. 1. The Landlord provided the following in response to the request in Section E (ii) of the application form for information in respect of the question "Describe in summary the case (evidence and arguments) you would have put to the Tribunal if you had not been absent": I would have presented documentary evidence to the Tribunal that: 1. I had complied with Landlord requirements under S228C. 2. The applicants' claim of financial hardship is not genuine. 3. The applicants failed to produce documentary evidence as per Fair Trading Guidelines of financial hardship despite repeated requests in writing thereby preventing any claim assessment or good faith negotiation. 4. I provided the applicants with a 50% rent "holiday" from March 29 to June 28 to assist with late receipt of Government payments. 5. The applicants' claims that I threatened eviction, that I changed the terms of their lease after they had moved in, and that I provided them with unsolicited financial advice, are false. 6. I offered to apply to the Land Tax office for a refund to be passed onto the applicants but they refused to provide the required proof of hardship. 1. The Landlord provided a Statutory Declaration, declared on 13 August 2020, relevantly, in the following terms, in response to the statement in Section E of the application form that the Statutory Declaration attached to the form should be completed: 1. The information I have provided in this form, including what is in section E (i) and (ii), is true and correct. 2. [Insert here any information or other evidence you rely on]. This affidavit is made in the Philippines and would normally be notarised by an attorney. Manilla is again under Stage 4 stay-at-home quarantining. All businesses are closed except food stores and pharmacies. There is no public transport or taxis. I will submit a notarised affidavit when the current quarantining is lifted. Note that all flights from Philippines to Australia from August to late October were cancelled after arrival caps were introduced in July by the Australian government. 1. The Landlord did not attach any supporting documents other than the flight cancellation email sent to him from Philippine Airlines on 2 May 2020 despite the statement in Section E of the form "Attach any supporting documents". 2. The Landlord sought a stay of the orders made on 6 August 2024 on the basis that: I do not believe the Tribunal would have made the orders in the attached "Notice of Orders" had it had the opportunity to consider my documentary and oral evidence. In the circumstances I believe that justice would be best served if the orders were stayed until all of the evidence is put before the Tribunal.
8. On 24 August 2020 the Tribunal ordered that the orders made on 6 August 2020 be stayed and made the following directions: 1. The Applicant is to make any submissions concerning the application to set aside by 28 August 2020, such submissions to be lodged with the Tribunal and provided to the Respondent in person or by post. 2. The Respondent is to make any submissions in reply to the Applicant's submissions by 4 September 2020, such submissions to be lodged with the Tribunal and provided to the Applicant in person or by post.
9. A Notice of these orders and directions made on 24 August 2020 were sent to the parties by the Tribunal, including by email to the email address for the Landlord given by him in the application form to set aside the decision. At the hearing of the appeal, initially, the Landlord said he had not received this Notice but, subsequently, accepted that he must have done so because he did provide a written submission (see further below).
10. The Landlord provided a written submission in support of the set aside application. This was confined to the issue referred to in Section E (i) of the application form concerning the reason he was absent from the hearing on 6 August 2020. No further information or material was supplied by the Landlord concerning the case that he would have put to the Tribunal if he had not been absent.
11. On 2 September 2020, the Tenants provided written submissions and evidence in opposition to the set aside application. Their submissions included that, having regard to the Appeal Panel's decision in Hammond v Ozzy's Cheapest Cars Pty Ltd [2015] NSWCATAP 65, the Tribunal, in the exercise of its discretion, should refuse to set aside the decision because: 1. The Landlord's explanation for his absence at the hearing on 6 August 2020 was inadequate. 2. The Landlord did not have an arguable defence. 3. It would not be unjust to let the 6 August 2020 decision stand, having regard to a number of factors, including that the Tenants relied on the 6 August 2020 orders by their entry into a new residential tenancy agreement in respect of new premises commencing on 5 September 2020.

The set aside decision

1. On 9 September 2020, on the papers, the Tribunal decided to dismiss the set aside application. The Notice of Order stated: The application to set aside the decision in matter number RT 20/34663 has been considered and the following orders are made: The application is dismissed because: Although the orders were made in the absence of the applicant, and the Tribunal is satisfied that the party's absence resulted in their case not being adequately put to the Tribunal, in the exercise of discretion the Tribunal is not satisfied that there is a real likelihood that it would be unjust to let the decision stand because: 1. The applicant has not adduced any evidence of any arguable defence. 2. The respondents would suffer prejudice if the application was granted because the (sic) have relied to their detriment on the order made on 6 August 2020. The stay order made in matter number RT 20/24200 on 24-08-2020 is lifted.

Grounds of Appeal

1. The set aside decision was an ancillary decision of the Tribunal within the terms of s 80 (2) (b) of the NCAT Act: see Hammond at [40]. Section 80 (2) (b) provides: 80 Making of internal appeals …. (2) Any internal appeal may be made - (a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds.
2. Accordingly, the appellant had a right of appeal on a question of law but otherwise required leave to appeal. Because the appeal was from an ancillary decision of the Consumer and Commercial Division a grant of leave to appeal could only have been made if the Landlord satisfied the conditions in clause 12 (1) of Schedule 4 of the NCAT Act.
3. By a Notice of Appeal lodged on 23 September 2020 the Landlord appealed from the set aside decision. It was stated in the Notice of Appeal that the Landlord did not ask for leave to appeal.
4. In the Notice of Appeal the appellant sought orders by the Appeal Panel that his set aside application be granted and there be a new hearing of proceedings RT 20/24200. Accordingly, in the event that we were to find that the appeal should be allowed on the basis of an error of law, the appellant sought a new exercise of the discretion by the Appeal Panel in his favour to set aside the 6 August 2020 decision.
5. Attached to the Notice of Appeal were "Appeal Submissions" which included four matters set out as Grounds of Appeal.
6. Subsequently, in accordance with directions for the conduct of the appeal, on 3 December 2020, the Landlord provided a new set of written submissions. These contained four nominated Grounds of Appeal which varied from those provided with the Notice of Appeal. At the hearing of the appeal, the Landlord told us that the "Appeal Submissions" document that had been provided with the Notice of Appeal was obsolete and had been replaced by the document provided on 3 December 2020.
7. Working from the Grounds of Appeal set out in the Landlord's written submissions document provided on 3 December 2020 we discern the following grounds of appeal: 1. The Tribunal erred in law in the exercise of its discretion by failing to apply the principle that the Landlord was entitled to present his case to the Tribunal given that, through no fault of his own, he was absent from the hearing. In support of this ground of appeal the Landlord relied upon passages from the decision of the High Court in Allesch v Maunz [2000] HCA 40; 203 CLR 172 (Ground 1). 2. The Tribunal erred in law in the exercise of its discretion by (1) applying a test of "likelihood" as to whether it would be unjust to let the decision stand and (2) by citing a lack of adduced evidence of an arguable defence as a reason for dismissing my application (Ground 2). 3. The Tribunal erred in law in the exercise of its discretion by mistakenly concluding that there would be prejudice to the Tenants if the decision were set aside when, in truth, there was no such actual prejudice, only the possibility of prejudice (Ground 3). 4. The Tribunal erred in law in the exercise of its discretion by failing to take into account that the original decision was flawed because the Landlord had not been served with the Tenants' principal evidence and other important documents in those proceedings, in accordance with the directions of the Tribunal in those proceedings and with s 228C (4) of the RTA (Ground 4).

Relevant legal principles

1. In identifying these grounds of appeal we have adopted the approach referred to by the Appeal Panel in Cominos v Di Rico [2016] NSWCATAP 5 at [13] as follows: 'It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, 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. The Appeal Panel has taken such an approach in a number of cases, for instance, Khan v Kang [2014] NSWCATAP 48 and Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. However, this must be balanced against the obligation to act fairly and impartially (Bauskis v Liew [2013] NSWCA 297 at [68] citing Hamod v State of New South Wales [2011] NSWCA 367 at [309]-[316]). Relevantly, s 38(2) provides that that Tribunal "may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice.'
2. We apply the law concerning the circumstances in which an appeal will be upheld from a discretionary decision of the nature made in this case, as outlined by the plurality of the High Court in House v King [1936] HCA 40; 55 CLR 499, namely: The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate Court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellant court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there is been a failure properly to exercise the discretion which the law reposes in the court first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
3. We note that in previous cases the Appeal Panel has applied this approach to an appeal from decisions on applications to set aside decisions under clause 9: see Bladen v Mifsud [2020] NSWCATAP 79 at [52] and Matthew Bryan v Lilly Gorgievski and Les Gorgievski [2015] NSWCATAP 186 at [29].
4. The following approach to the determination of set aside applications under clause 9 (1) (b), set out in the Hammond decision, has been consistently applied by the Tribunal: Determination of Set Aside Application …… 64 Accordingly, before the Tribunal's power to set aside a decision that determines proceedings arises, the Tribunal must be satisfied that: (1) The decision was made in the absence of a party; and (2) That absence resulted in the party's case not being adequately put to the Tribunal. 65 If those two requirements are satisfied, the Tribunal then has a discretion to set aside or vary the decision. This follows from: (1) The use of the word "may" in the chapeau to cl 9(1); (2) The terms of s 53(3) of the Act, having regard to the reasoning of Basten JA in Atkinson v Crowley [2011] NSWCA 194 at [12]-[13] in relation to a similar provision in the legislation which applied to the Consumer Trader and Tenancy Tribunal, before it was abolished; and (3) The fact that cl 9(1)(b) applies in situations extending beyond those in which it might be held that the proceedings are a nullity (see, for example, Hoskins v Van Den-Braak (1998) 43 NSWLR 290 at 294 and the authorities there cited). ….. Principles Applicable to the Discretion to Set Aside 74 Since both requirements of cl 9(1)(b) are satisfied, the discretion whether or not to set aside the original decision is enlivened. 75 The discretion conferred by cl 9(1)(b) is unfettered by any express requirements of that clause but it must be exercised having regard to the statutory context in which the Tribunal operates. In particular, when applying cl 9(1)(b), the Tribunal must seek to give effect to the guiding principle referred to in s 36(1) of the Act: see, for example, Homeark Constructions v Hillside Excavations [2014] NSWCATAP 77 at [38]….. 76 The central question in exercising the discretion is whether there is a real likelihood that it would be unjust to let the decision sought to be set aside stand. If so, it should be set aside on such terms as will minimise the possibility of injustice to the party which had obtained the original decision in its favour. See, for example, CMT [2014] NSWCATGD 11 at [67] and [68(e)]; Northey v Bega Valley Shire Council [2012] NSWCA 28 at [16]; Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR NSW 239 at 243-4 - these latter two cases are both authorities dealing with r 36.16(2)(b) in the Uniform Civil Procedure Rules 2005 (NSW), or its predecessor, equivalent to cl 9(1)(b). 77 Justice generally requires that parties against whom orders are made must be given a reasonable opportunity of appearing and presenting their case: Cameron v Cole (1944) 68 CLR 571 at 589. In the Tribunal, s 38(5)(c) of the Act provides: (5) The Tribunal is to take such measures as are reasonably practicable: … (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. 78 If a party has been given such an opportunity, however, and has deliberately not taken it, there may well be no relevant injustice if the decision is allowed to stand: see, for example, CMT [2014] NSWCATGD 11 at [68(a)]. In this regard, the issue of why the party was absent from the hearing may be very significant: see, for example, Homeark Constructions v Hillside Excavations [2014] NSWCATAP 77 at [37], [39] and [40]. 79 Injustice will only be likely to result if the party seeking to set aside the decision has an arguable defence or an arguable case that a different decision could have been reached. If not, setting aside the decision would be futile. See, in a different but related context, Kyriakou v Long [2013] NSWSC 1890 at [33] and [55], approved on appeal in Kyriakou v Long [2014] NSWCA 308 at [18]. Section 38(4) of the Act is consistent with this approach, in that it requires the Tribunal to act according to the substantial merits of the case without regard to technicalities or legal forms. 80 In summary, when exercising the discretion conferred by cl 9(1)(b), the Tribunal should direct its attention to whether there would be a real likelihood of injustice if the decision was allowed to stand. Relevant considerations will generally include: (1) Why the party was absent and whether the absent party had a reasonable opportunity to be heard or otherwise have its submissions considered in the proceedings; and (2) Whether the absent party has an arguable defence or an arguable case that a different decision could have been reached. 81 Setting aside a decision will naturally involve a degree of prejudice to the party which was initially successful. As part of the exercise of the discretion, the Tribunal should also consider how that prejudice can be cured or reduced, for example by the framing of any set aside order or by the imposition of suitable conditions on that order. Conditional orders can be made in the Tribunal under s 58 of the Act.

The parties' submissions on appeal

1. The Landlord relied upon his written submissions provided on 3 December 2020. In those submissions, in addition to submissions directed to the grounds of appeal, the Landlord also relied upon a section of these submissions (pages 7 to 17) titled "Evidence Of An Arguable Case". This section commenced with a reference to the statement by Kirby J in Allesch (at [56]) that: All that the applicant need show in such circumstances is that a materially different result might arguably follow from permitting a reopening.
2. The Landlord went on to explain that the material set out in this section concerning evidence of an arguable case was included for the purpose of demonstrating that he had an arguable case to present in proceedings RT 20/24200. It was then said that all of the evidence referred to in the document was available to the Tribunal at the hearing on 6 August 2020.
3. The Landlord also relied upon written submissions provided on 21 January 2021 in response to the Tenants' written submissions on appeal. These included the text of numerous emails.
4. These written submissions were supplemented by oral submissions by the Landlord at the hearing of the appeal. In his oral submissions the Landlord gave emphasis to the following submissions: 1. The contention that the Tribunal had not applied the principles in Allesch. 2. It was not appropriate or efficient for the Appeal Panel to delve too far into the merits of the case he would have presented in the original proceedings but he had sought to do enough to demonstrate that he had an arguable case. This was based upon the material that the Tenants had themselves presented to the Tribunal in the original proceedings that he said he had shown to be incorrect or to have omitted information. However, in deciding the set aside application the Tribunal appeared to have misunderstood that his case depended upon evidence that he would adduce. 3. The Tribunal had misunderstood the prejudice that the Tenants had suffered. In truth, it was only the possibility of prejudice if the Landlord was, ultimately, successful at a new determination of the original proceedings. 4. An email sent to him on 5 August 2020 by the Tenants did not make him aware of the hearing on 6 August 2020 or that the Tenants had brought proceedings for early termination of the residential tenancy agreement. 5. He completed the form for the application to set aside the 6 August 2020 decision in circumstances of urgency and without material documents concerning the conduct of the original proceedings, including the directions that had been made by the Tribunal on 23 July 2020. 6. If he had been aware of the original proceedings he would have challenged the Tenants position that they were impacted tenants and that he had failed to negotiate a rent reduction in good faith. As to the latter, the Tenants had failed to answer his requests for documentation, particularly, concerning their pre-Covid 19 income. Furthermore, there were discrepancies in the information they supplied to the Tribunal in the original proceedings and if various justified changes were made to their numbers there was not the required 25% reduction in household income.
5. The Tenants relied upon written submissions and evidence provided on 8 January 2021. The evidence presented included new evidence that had not been presented to the Tribunal for the determination of the set aside application.
6. These written submissions were supplemented by oral submissions from Ms Gomes at the hearing of the appeal. The oral submissions included that the Landlord had been given a full opportunity to present all relevant material to the Tribunal in support of his set aside application. She also made submissions concerning satisfaction of the conditions for the making of an early termination order under s 228C and about they prejudice the Tenants would suffer if the set aside application was successful.

Ground 1

1. We do not agree that the discretion in Regulation 9 had to be exercised in the Landlord's favour if and when he established that his absence from the hearing on 6 August 2020 occurred through no fault of his own. As is clear from Hammond, a second factor to be considered in the exercise of the discretion is whether the Landlord showed he had an arguable defence. It was the application of this factor that led to the rejection of his application.
2. The Landlord put forward the following two passages (in that order) from the decision of the plurality in Allesch in support of this ground of appeal (footnotes omitted): [27] In Taylor, Gibbs J, with whom Stephen J agreed, and Mason J, with whom Aickin J agreed, each viewed the discretion to set aside an order made in the absence of a party as a corollary to the requirement that, before a person can be adversely affected by a judicial order, he or she must be afforded an adequate opportunity of being heard. In that case the party's failure to appear was due to no fault of his own and Mason J expressed the view that the discretion to set aside the order made in his absence should have been approached "on the footing that it was prima facie the right of each party to have the proceedings heard in his or her presence and that justice to both parties required that each party should be entitled to present his or her case." Murphy J saw the discretion to reopen as an aspect of federal judicial power which was to be exercised "only with caution." The factors to be considered, in his Honour's view, were "the presence or absence of some real explanation for failure to use the opportunity to be heard, delay, acquiescence, [and] prejudice to the other party." However, nothing presently turns on whether the inherent power to set aside an order made in the absence of a party is a corollary to the right of a party to be heard or is an aspect of federal judicial power. [15] In the Full Court, Kay and Brown JJ pointed out in their joint judgment that, although the power to set aside orders made in circumstances in which a party has not been heard is discretionary, "once a reasonable excuse has been proffered for non-attendance and it is clear that there may well be a significantly different result achieved if the matter is reheard, then the discretion is a severely narrowed discretion." In their Honours' view, Finn J fell into error in treating the proceedings as unusually protracted, in making reference to the ease with which the husband could have sought an adjournment and in giving undue emphasis to the wife's mental health when the evidence was not specific in that regard.
3. However, neither of these passages deny the relevance of the factor concerning the demonstration of an arguable defence. Notably, the plurality took no issue with the passage from the Full Court set out in [15] "and it is clear that there may well be a significantly different result achieved if the matter is reheard". Furthermore, Justice Kirby (at [48]) referred to two criteria that had for a very long time been viewed as critical to an affirmative decision to set aside, namely: (1) that an explanation, reasonable to the circumstances, is provided for the party's absence or other default; and (2) that the party in default has a material argument which, if heard and decided on its merits, might reasonably affect the determination of the rights and duties of the parties in a way different from that in the impugned order.
4. Kirby J went on to say (at [50]): Similarly, there will be no miscarriage of justice if the party affected by the impugned order cannot demonstrate an arguable case that reopening the matter might reasonably produce a materially different result which is more favourable to that party….
5. We note that the Landlord's written submissions concerning this ground of appeal incorrectly set out what was said in [27] about Murphy J's reference to "only with caution". The Landlord's written submissions set out the passage as "Murphy J saw the discretion not to reopen [our emphasis] as an aspect of federal judicial power which was to be exercised "only with" caution but we have, correctly, set out the passage above.
6. For these reasons, we reject Ground 1 of the appeal.
7. In these circumstances, it is unnecessary for us to address the Landlord's submission that his absence at the hearing on 6 August 2020 occurred through no fault of his own (noting that there was no finding to this effect in the Tribunal's reasons). In saying this, we do not intend to indicate that we agree with the Landlord's contention.

Ground 2

1. We do not agree that the Tribunal erred by applying the criteria that there be a real likelihood that it would be unjust to let the decision stand. This was an application of what was said by the Appeal Panel in Hammond at [76] and [79]: see in paragraph [48] above.
2. The Landlord submitted that this criteria was inconsistent with the High Court's rejection in Allesch of a test of certainty in relation to the prospect of a different outcome at a new hearing. In this regard, the Landlord relied upon the following passage from the decision of Kirby J (footnotes omitted): [56] In this part of the majority's reasons, their Honours erred to the extent that they applied a test of "certainty" to whether a different order could be achieved by the appellant. This was too onerous. Certainty does not represent the obligation which the law places upon a person in the position of the appellant. In litigating any complex issue, predictive certainty is hard to attain. In the nature of applications to set aside otherwise binding court orders and to reopen cases, it is a mistake to apply a test of certainty. In the nature of such applications, it is often impossible, or inappropriate, for the applicant to adduce all of the evidence which, if reopening were allowed, that party would then later adduce. To impose such an obligation on the applicant would involve an inefficient use of the court's time because, in the quest for certainty, it would virtually always enlarge a procedural application into the final determination of the issue. All that the applicant need show in such a circumstance is that a materially different result might arguably follow from permitting a reopening.
3. We disagree that there is any inconsistency. On the contrary, the Appeal Panel's application of this criteria in Hammond, as applied by the Tribunal in this case, involved an assessment as to whether the applicant in the set aside application had shown there was an arguable defence: see in Hammond at [79]. This was consistent with what Kirby J said in the last sentence of [56] and with what he said at [48] (see paragraph in [58] above).
4. As to the second aspect of Ground 2, the Landlord submitted that it was contrary to the passages in [56] of Allesch which said that there was no requirement that an applicant adduce all of the evidence it would later advance if a reopening was allowed [our emphasis]. However, it is clear that the Tribunal did not proceed on the basis that there was any such requirement.
5. Further, as to the second aspect of Ground 2, the Landlord also made the following submissions: 1. It may be that the Tribunal misunderstood the nature of the arguable defence that the Landlord wished to present, namely that there was little or no additional evidence for the Landlord to present over and above the correspondence and personal and financial information that the Tenants had already presented. 2. It was unreasonable and contrary to NCAT's rules of procedural fairness for the Tribunal to expect the Landlord to adduce evidence of an arguable defence, over and above that required by the set aside application form instructions, within 4 hours of receiving the Tenants' application and the Tribunal's orders (without reasons). As to this, it was uncontroversial that the Landlord received the application in the original proceedings and the Tribunal's orders of 6 August 2020 on 13 August 2020, whilst he was in Manila, and lodged the set aside application by email later that day.
6. However, as to (1), as appears from what the Landlord said in Section E(ii) of the set aside application form, the Tribunal was informed by the Landlord's application that his defence was founded upon documentary evidence that he would have presented had he been present at the hearing. The Landlord did not correct or modify that statement in any subsequent submission before application was determined. Accordingly, we see no merit in this point.
7. As to (2), we have set out above (see in paragraphs 28, 31, 32 (5) and (6)) the references from the NCAT website and in the application form itself which conveyed the need to support the application with relevant documents and also by statements in the Statutory Declaration.
8. If the Landlord needed more time in which to provide supportive material then it was open to him to have sought an extension of time in which to lodge the application or to have provided such material subsequently, during the period before the application was determined. In this regard, we note that the Landlord made no further reference to the nature of his arguable defence in written submissions, despite the opportunity that he had to do so.
9. In view of these matters concerning points (1) and (2) raised by the Landlord, it seems to us that the Tribunal's reliance upon the absence of evidence supporting an arguable defence was responsive to the material put forward by the Landlord, correct in fact, and pertinent to his consideration of the application. All the Tribunal had before it were broad assertions by the Landlord in answer to the Tenants' claim. Furthermore, we see no procedural unfairness to the Landlord in the Tribunal's reliance upon this factor.
10. Accordingly, we reject Ground 2 of the appeal.

Ground 3

1. As to Ground 3, the Landlord submitted that the Tribunal's conclusion about prejudice was wrong. He submitted that the prejudice to the Tenants was only theoretical in the sense that it would only occur if the Landlord was successful at a new hearing. The Landlord submitted that when such prejudice was measured against the prejudice to the Landlord in being prevented from presenting his case reliance on prejudice as a ground to refuse the application was "insufficiently compelling".
2. In support of this submission the Landlord pointed to the references in the plurality's decision in Allesch to the discretion to refuse a set aside application being a "severely narrowed discretion" and one that should be used "only with caution".
3. We have already referred to the need to correct the Landlord's reliance upon the passage concerning Murphy J's reference to the need for caution: see paragraph [59] above.
4. The reference to a "severely narrowed discretion" was a reference to the following passage from the judgement of the Full Court of the Family Court set out at [15] of the reasons of the plurality in Allesch (see in paragraph [57] above): "once a reasonable excuse has been proffered for non-attendance and it is clear that there may well be a significantly different result achieved if the matter is reheard, then the discretion is a severely narrowed discretion."
5. Nevertheless, such a statement does not deny the existence of prejudice as a relevant consideration and in Hammond prejudice was dealt with as a relevant factor (at [81]: see paragraph [48] above).
6. Turning to the alleged error about the nature of the prejudice, we do not accept the Landlord's submission that the Tribunal misunderstood the prejudice. It was obvious that the Tenants would only suffer actual financial detriment if the Landlord succeeded at a new hearing. The Tribunal did not characterise the detriment as actual financial detriment. Rather, it saw the detriment as the entry into a new tenancy agreement in reliance upon the orders made on 6 August 2020. Such a step meant the prejudice to the Tenants was the risk that it would have to bear the financial burden of rent payable in respect of two properties for about a three-week period in September 2020 should the Landlord succeed at a new hearing. That was a prejudice that it was open to the Tribunal to take account of. We do not understand the Tribunal to have made a different assessment of the prejudice.
7. Even if we were wrong about this, it remains the case that the Tribunal's conclusion concerning the existence of an arguable defence was sufficient in itself to warrant the exercise of the discretion to refuse the application.
8. Accordingly, we reject Ground 3 of the appeal.

Ground 4

1. In support of Ground 4 of the appeal the Landlord's submissions included: 1. As must have been apparent to the Tribunal on 6 August 2020, it was not until late on 5 August 2020, by email, that the Tenants provided the Landlord (by any means) with important documentation in support of the Tenants' case in the original proceedings, contrary to directions made by the Tribunal on 5 June 2020 and 23 July 2020. 2. As must have been apparent to the Tribunal on 6 August 2020, the Tenants never provided the Landlord (by any means) with a copy of the application under s 228C, as required by s 228C (4). 3. Given the matters referred to in (1) and (2), the Tribunal should not have proceeded to determine the matter against the Landlord upon the basis of this material. As to this, the Tribunal on 6 August 2020 should have applied Clause 14 of NCAT Procedural Direction 1. Alternatively, it should have adjourned the matter so as to determine whether the Landlord had made a deliberate choice not to be heard in the proceedings-as to this, it was also apparent to the Tribunal on 6 August 2020 that the Landlord had been silent throughout the whole of the proceedings to that point. 4. The Landlord then submitted: 7. In exercising its discretion to dismiss my set aside application, the Tribunal did not appear to take into consideration that the Tribunal on August 6 was entitled to invoke Clause 14 of NCAT Procedural Direction No.1. Had Clause 14 been invoked on August 6, the documentary evidence of the tenants would have been avoided. I submit that in those circumstances, and my "silence" throughout, the Tribunal erred in not determining that the decision made on August 6 was unsafe and that a new hearing would best serve the interests of justice.
2. Clause 14 of Procedural Direction 1 states: The Tribunal may refuse to allow a party to rely at a hearing on a document if the document has not been served on all the other parties to the proceedings prior to the hearing or in accordance with any directions of the Tribunal.
3. The threshold problem for the Landlord in relation to Ground 4 and with these submissions in support of that ground is that these contentions concerning the fairness of the original proceedings and the decision on 6 August 2020 were not advanced to the Tribunal in its determination of the set aside application, despite the opportunity given to the Landlord to do so.
4. The Landlord cannot, reasonably, complain that the Tribunal determining the set aside application failed to take such matters into account when no contention about those matters was made by the Landlord in presenting its case for the decision to be set aside.
5. Furthermore, these criticisms of the process concerning the original decision do not overcome the failure to show the Tribunal determining the set aside application that there was an arguable defence to the claim in those proceedings. As was said by Kirby J in Allesch (at [50]): Similarly, there will be no miscarriage of justice if the party affected by the impugned order cannot demonstrate an arguable case that reopening the matter might reasonably produce a materially different result which is more favourable to that party. If the process by which that order is made is flawed, but it is not shown that the outcome might reasonably be materially different, the party offended by the process may be upset by a sense of procedural injustice. However, upon analysis, that feeling will not find reflection in the ultimate disposition of the rights and duties of the parties with which the law is finally concerned. Correction concentrates on any supposed error in the ultimate judicial orders and not exclusively on the procedures leading to, or reasons given for, those orders.
6. Accordingly, we reject Ground 4 of the appeal.
7. For these reasons, we do not accept that there was any appealable error by the Tribunal in the exercise of its discretion that would allow us to overturn the set aside decision.

Other matters

1. Because we have found no appealable error by the Tribunal, no question arises as to whether we should re-exercise the discretion or remit the proceedings to set aside the decision to the Tribunal for redetermination.
2. A number of submissions made by the parties, with supporting evidence, were pertinent only to a re-exercise of the discretion to set aside should that stage be reached. This included material about the merits of a defence by the Landlord to the claim for early termination, as well as material about whether the Landlord was at fault in failing to appear in the original proceedings and whether he had provided a reasonable explanation for his absence.
3. However, for the reasons indicated, these matters do not fall for consideration by us in disposing of this appeal.

Orders

1. For the above reasons, we order that 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

Amendments 18 May 2021 - Updated details of coversheet so the correct cells match with the correct cell heading. 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 2021