Bickerton v McSelan Holdings Pty Ltd

Issues 1. Has the landlord failed to comply with consent orders made on 8 June 2018? 2. If so, are the tenants entitled to a rent reduction and if so, in what amount? 3. Are the tenants entitled to bring a claim for reimbursement of a pest inspection report when the parties reached an agreement in respect of the dispute in full and final satisfaction of the claim and this was not included in the settlement terms?

Background

1. The parties entered into a residential tenancy agreement (RT agreement). A RT agreement was signed by the tenants but the landlord did not receive the original copy back which the tenants say was posted to them. There is disagreement between the parties as to the term of the tenancy agreement.
2. The tenancy commenced on 11 October 2017 with a weekly rent of $300.
3. The tenants reside in the residential premises with two young children and a disabled son who resides there periodically.
4. The residential premises are located in the small rural town of Finley and the property located a few kilometres out of town. The property is not connected to town water but is serviced by 2 rain water tanks. There is one rain water tank close to the house and another tank which is located near the neighbouring fence line.
5. The landlord resides and farms at the neighbouring property.
6. The landlord issued a Notice of Termination to the tenants purporting to end the tenancy pursuant to s 84 of the RT Act being the end of a fixed term agreement.
7. The landlord issued a further Notice of Termination on 8 May 2018 providing for vacant possession to be given on 10 August 2018. The landlord filed an application RT 18/35158 with the Tribunal seeking termination and vacant possession. This matter was listed for hearing with this current matter but was withdrawn at the hearing when the Notice of Termination (NOT) had not provided for the sufficient period of 90 days. The NOT had not allowed for postage pursuant to the Postal Service Rule in accordance with s 76(1)(b) of the Interpretation Act 1976.

Jurisdiction

1. The dispute between the parties arises from their relationship as landlord and tenants under a RT Agreement governed by the RT Act. Part 9 of the RT Act confers jurisdiction to the Tribunal to hear and determine disputes.
2. The dispute has been lodged within the 3 month time limit as required by clause 22 of the RT Regulation 2010.

Applicant's Evidence

1. The tenants were represented by Ms Ryan, tenant advocate, at the hearing and Ms Bickerton appeared in person. Mr Lilburne did not attend the hearing.
2. The tenants filed a number of documents with the Tribunal, both in RT 18/16022 and RT 18/34757. Ms Bickerton gave evidence under affirmation.
3. In the initial application RT 18/16022, the tenants raised complaints in relation to vermin at the property, including spider webs and the presence of a snake; the state of the slate floor tiles; pool maintenance and associated costs; sprinklers not working; and a blocked drain that flooded the shed.
4. The renewal application is limited to the loss of use of the cooktop and oven, the water quality and whether the tenants are entitled to a refund of the pest inspection report.

The cooktop and oven

1. The tenants claim compensation for the loss of use of the cooktop as they claim that the cook top didn't regulate the heat. Ms Bickerton's evidence was that she was not able to boil water on the cook top as the elements would not produce sufficient heat.
2. The tenants claim compensation for the loss of use of the oven. Ms Bickerton's evidence was that there were two ovens. The top oven did not work and the second oven did not warm sufficiently or would burn items as the heat was unable to be regulated. Ms Bickerton's evidence was that she was required to use an electric wok for cooking and that she normally prepares all of the family meals using the oven and would normally use an oven every day and that she rarely used a microwave for meal preparation.
3. The tenants claim compensation for loss of use of the oven and cooktop from 11 October 2017 to 28 August 2018 in the amount of $150 per week. Further, that there were two ovens present at the commencement of the tenancy and now the tenants only have one working oven.

The Water Quality

1. The tenants claim that the water is not fit for human consumption. Consequently, they have been purchasing bottled water for drinking and cooking and seeks compensation in the amount of a rent reduction of $150 per week from the commencement of the residential tenancy agreement and ongoing.
2. At page 52 of the tenant's bundle of documents received 27 April 2018, the tenants claim that the rainwater tank has not been maintained and that they bought slabs of bottled water from the time that they moved in, stating that the filter fitted does not kill bacteria. The tenants made enquiries about purchasing a triple filtration at the cost of $1500 and to have the tank cleaned. However, the tenants claim that this should be the responsibility and cost of the landlord.
3. The tenants also claim that the gutters were "full when we moved in and should be clear at all times as they are catchments for rain water tank" (Applicants' bundle 1 at 52).
4. Ms Bickerton's oral evidence was that there was dirt in the water and that she had to re-wash the dishes and clothes.
5. The tenants reported the issue to the landlord at the routine inspection on 11 January 2018 and complained again to the landlord on 20 February 2018.
6. Ms Bickerton's evidence is that she had been told by the owner that if her water tank was low that she was to tell him and he would "top it up" using the neighbouring tank which was connected to channel water. The tenant's documents at page A1.16 of the bundle dated 24 May 2018 contain a copy of a text to the agent dated 13 March 2018 requesting a "top up".
7. Following receipt of the landlord's water sampling results from Regional Laboratory Services, Ms Bickerton's oral evidence was that she contacted them to assist her in interpreting the results. Her evidence was that she spoke with David Paynter by phone who told her that he believed that the water was dam water and questioned the source of the sampling.
8. The tenants obtained a report from NSW Health from a water sample taken from the kitchen tap dated 21 August 2018. The tenants provided an email from Mr James Allwood, Senior Environmental Health Officer, Murrumbidgee and Southern NSW Local Health Districts Public Health Unit, to Ms Bickerton dated 5 September 2018 that states: The results confirm the quality of water is being influenced by a number of onsite factors, as detailed in my previous email. Based on these results (+ previous results) and observations/discussions onsite, I would have no confidence on the safety of the water being supplied. I would advise against drinking the water, using for brushing teeth, food preparation etc.
9. Ms Bickerton's evidence is that the larger tank on the neighbouring premises feeds into the smaller tank which provides water from an irrigation channel when empty. This is confirmed by the landlord (see A1.37 of the Applicant's documents dated 24 May 2018)
10. Ms Bickerton claims that the local council has advised her that the landlord should install a new tank and only water purchased from the local council should be placed in the tank.
11. The tenants provided receipts for the purchase of water totalling $504.00 with the first receipt dated 8 May 2018. The tenant also purchased 1300 litres of water delivered and placed in the tank on 11 October 2018 for $156.00.
12. The tenants claim a rent reduction of $150 per week from the commencement of the tenancy and ongoing on the basis that they have been required to purchase water and for the inconvenience of using bottled water.

Pest inspection report

1. The tenants claim reimbursement in the sum of $500 for the pest inspection report which they obtained and provided to the landlord. The tenants claim that they obtained the report in support of the claim that the landlord had breached its obligations pursuant to ss 52(1)(a) and 63(1) of the RT Act with the presence of pests and vermin at the residential premises.

Respondent's Evidence

1. Ms Molnar appeared on behalf of the landlord and gave evidence under an affirmation. The agent also filed documents in support of the landlord (landlord's bundle of documents).

The cooktop and oven

1. The agent's evidence was that the first time that the tenants raised the issue that the oven and cooktop were not working was when a routine inspection was undertaken in January 2018. At this time, the agent's evidence was that the tenants reported two of the four hotplates were not working efficiently.
2. The agent's evidence was that on a pre-inspection, the oven and cooktop appeared to be in working order.
3. The agent's evidence was that she immediately advised the landlord of the issues with the oven and cooktop and the landlord directly contacted his preferred supplier in town to inspect the items for the purpose of repairing them. In the respondent's bundle of documents, there is an email from the landlord to Betta Home Living dated 10 February 2018 (tenant's bundle of documents at A1.37) and an email to the agent who forwarded it to the tenant advising that a job had been logged with Betta Electrical and the tenant could liaise with them.
4. In the landlord's bundle of documents filed with the Tribunal on 20 April 2018, in a letter from Betta Home Living which is undated, it notes We have not been able to attend the rental property owned by Sean as we have been extremely busy and have had staff away unexpectedly. Apologies in the delay, we will work with you shortly to organise an appropriate time.
5. Betta Electrical Living sent a letter to the agent dated 26 May 2016 reporting following their inspection on 10 May 2018 and advised: Found Cooktop hotplates to be cycling as per expected. Expect (sic) 2nd ring of outer big element. On inspecting service manual this unit had a unique way of firing the 2nd ring of cooktop. Sent instructions to client mobile and have not heard anything back. Re oven due to the age of the oven being St George parts are extremely rare and expensive. And only senior members of our team are experienced to work on such a unit. After looking up our records (previous owner) the Parts and labour were more than $500. Advised Sean might be time to look at modernising to a newer one and he agreed.
6. Betta Home Living sent an email to the landlord an email dated 31 July 2018 advising: Have been trying to get onto Dustin for several weeks since you advised me to continue with oven change over. Have rang and TXT with no reply. Was able to ring today and Dustin Advised his phone has played up. Have now sent Quote request to Cabinet maker hope to get back to you soon re Quote to complete works, just thought I would update you as I know that this job is time Sensitive.
7. Ms Molnar concedes that the delay in repairing the oven and cooktop was not reasonable. However, attempts had been made by the landlord to carry out the repairs but there were difficulties with tradesman and given that it is a small rural community with limited access to tradesman, which included a cabinet maker for installing the oven. It was the landlord's preference to use Betta Home Living in his local town. The next local town is approximately one hour away.
8. Ms Molnar's evidence was that Ms Bickerton had indicated that she was happy to use the wok and does not believe that she is entitled to the amount of compensation claimed. Further, the tenants contributed to the delay by not being contactable by the relevant tradesman to arrange suitable times to attend the residential premises.

Water Quality

1. Ms Molnar's evidence was that she had contacted the landlord after being notified with concerns in relation to the water quality at the routine inspection on 11 January 2018 and responded promptly. The landlord replied to the tenant's email dated 10 February 2018 (A1.36 of tenant's bundle of documents) refuting any suggestion that the water quality was poor.
2. The landlord obtained a report from Regional Laboratory Services dated 7 May 2018 in response to concerns from the tenant in relation to the quality of the tank water. This report formed part of the landlord's bundle of documents in RT 18/16022. This report was the basis for the parties agreeing to obtain a "plain language report".
3. Ms Molnar's evidence was that she had contacted the laboratory services that conducted the previous water report but they were unable to translate the report into "plain language" but referred to the "interpretation of Values in relation to water quality guidelines for human consumption" reference sheet attached to the results.
4. The landlord obtained a further report from Swep Pty Ltd dated 18 October 2018. The sample is identified as from "1-tank". Ms Molnar's evidence was that the landlord personally took the sample from the larger tank stating that the larger tank flows into the tank on the residential premises.
5. The report noted that reference to the SWEP fact sheets for understanding of the report was necessary. There was no specific analysis of the results provided. The sample shows high potassium and high nitrate.
6. Ms Molnar's evidence is the landlord believes that the water is safe for human consumption.

Pest inspection report

1. The landlord denies that it should reimburse the tenant for the cost of the pest inspection report as claimed by the tenant.
2. The landlord's evidence was that the tenant first contacted the agent on 25 February 2018 to advise them of a snake at the residential premises. The landlord notes this as being some 4.4 months since the commencement of the residential tenancy.
3. The landlord notes the ingoing inspection reports notes cobwebs but there is no notation of the presence of spiders. The landlord claims that the presence of spiders or other vermin some four months into the tenancy is the responsibility of the tenants.
4. However, as part of the conciliated agreement, the landlord agreed to undertake pest treatment.
5. The landlord has provided a Tax Invoice from Pooley's Pest Control stating that rodent treatment to site was undertaken, however spiders were not treated at this time owing to the weather. Ms Molnar's evidence was that this was undertaken six weeks later.
6. In response to the tenants' entire claim, the agent states that the tenants could have moved out of the residential premises at any time if they found that the premises did not suit them.

Relevant Law

1. Clause 8 of Schedule 4 of the Civil and Administrative Tribunal Act (CAT Act) provides for the renewal of proceedings if the order of the Tribunal is not complied with. Clause 8(4) of the CAT Act provides the Tribunal may: (a) may make any other appropriate order under this Act or enabling legislation as it could have made when the matter was originally determined, or (b) may refuse to make such an order.
2. The landlord's obligations in respect of the repairing residential premises is set out in s 63 of the RT Act, which relevantly provides: 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, rent payable for and prospective life of the premises. (2) The 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 the occupation of the residential premises. (3) The 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. ...
3. Pursuant to s 65 of the RT Act, the tenants may apply to the Tribunal for an order that the landlord carry out repairs, or an order that the landlord reimburse the tenants the amount for urgent repairs carried out by the tenant. Under s 65(2), the Tribunal only make an order regarding repairs "...if it determines that the landlord has breached the obligation under this Act to 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".
4. Section 65(3) of the RT Act states as follows:- 65 Tenant Remedies for Repairs ... (3) The Tribunal must not determine that a landlord has breached the obligation unless it is satisfied that:- (a) the landlord had notice of the need for the repair or ought reasonably to have known of the need for the repair, and (b) the landlord failed to act with reasonable diligence to have the repair carried out.
5. There is no breach of the landlord's obligation to repair premises under s 63 of the RT Act (as distinct from an obligation to provide remises at the commencement of the tenancy which are reasonably clean and fit for human habitation under s 52 of the RT Act) unless the landlord is aware (or should reasonably be aware) of the need for repairs, and fails to act in a reasonably timely manner to conduct such repairs (or does not conduct adequate repairs: Northern Sandblasting Pty Limited v Harris (1997) 188 CLR 313 at 370-371; Jones v Bartlett (2000) 205 CLR 166 per Gleeson CJ at 176 and Callinan J at 239; Sakaua v Williams [2005] NSWCA 405).
6. In respect of compensation for breach of a landlord's obligation under s 63 of the RT Act, the relevant legal principles are summarised in Anforth, Christensen and Taylor, Residential Tenancies Law and Practice NSW 7th edition (Federation Press, 2017) at pp 169-183 (and in particular, the table of comparative verdicts at pp 375-397). Further, as in any proceedings involving the award of damages for breach of contract, if the landlord has committed breach, damages are not recoverable unless the tenant has taken all reasonable measures to mitigate the tenant's loss. The landlord bears the onus of proof in respect of failure to mitigate.

The oven and cooktop

1. The parties agree that the landlord was first on notice of maintenance issues at the residential premises following a routine inspection on 11 January 2018.
2. The terms of the conciliated agreement provided for a separate and independent inspection and report on the oven and cooktops for the main stove. This agreement was reached on 8 June 2018.
3. The parties agree that a new oven was installed and replacement of larger element in cooktop on 28 August 2018.
4. The tenant claims a rent reduction in the amount of $150 per week for the loss of use of the oven and cooktop from the commencement of the tenancy until 28 August 2018 when they were repaired.
5. The letter from Betta Home Living dated 10 May 2018 indicates that the landlord was previously aware of issues with the oven. The photographs appear to depict an oven with a warming drawer below, rather than a separate oven. However, Ms Bickerton denied this in her oral evidence. The Tribunal does not accept that the tenant should be compensated for the loss of two ovens as claimed as the tenants have not established the reliance on two ovens but rather the loss of an oven.
6. The evidence from the landlord was that Betta Home Living sent the tenants instructions for using the cooktop on 10 May 2018 and not heard anything further from them and had therefore assumed that it was working. However, the landlord was aware at the time of the hearing on 8 June 2018 that the cooktop continued to have problems.
7. The Tribunal finds that there was an unreasonable delay in repairing the oven and cooktop.
8. The Tribunal notes that the tenants in part contributed to the delay by not responding to text messages from tradesman who were attempting to negotiate for the installation of the oven. Ms Bickerton raised concerns that the tradesman had been attempting to contact Mr Lilburne rather than herself. However, given that Ms Bickerton had previously raised concerns with the agent that the landlord had interfered with her privacy, it was not unreasonable for the tradesman to contact Mr Lilburne. Ms Bickerton also advised the agent that she suffered from autism which made communication difficult for her at times.
9. Ms Bickerton's evidence was that Mr Lilburne, was incarcerated from December 2017 to May 2018. However, in correspondence to the agent Ms Bickerton had advised that Mr Lilburne was away. Text messages sent to Mr Lilburne were therefore not received for extensive periods of time during this period.
10. The Tribunal finds that the tenants have failed to mitigate the loss of use of the oven in the period following notification to the agent of the oven not working and the commencement of the initial Tribunal proceedings.
11. In Anforth, a comparative table for compensation claims in Tribunal proceedings cites the following: 1. In Vinensig v Tareha (2007), the Tribunal awarded compensation in the amount of $5 per week compensation for loss of use of the stovetop. 2. In Harpley v Arceo (2000) the Tribunal awarded the sum of $350 for a defective stove over three months and for three bedrooms doors that had no locks. 3. Further, in Prest v Watts (2009) the Tribunal awarded $350 for the loss of use of the cooktop for a period of 14 weeks. 4. In Carney and McCaig v Elphick (2013) the Tribunal awarded $10 per week rent reduction for the withdrawal of a stove: Anforth at 378.
12. In consideration of the above, the Tribunal finds that landlord should provide a rent reduction of $25 per week for the loss of use of the oven and cooktop from one week after the conciliated agreement being 15 June 2018 until repairs were completed on 28 August 2018, noting that the parties did not negotiate any payment of compensation at the time of reaching their agreement.

Water tank

1. The report from Regional Laboratory Services was taken on 8 May 2018 by the owner but does not describe where the water sample as taken from. It indicates coliforms of 1441 and E.coli of 1 at 35oC. The associated description notes that for coliforms >10, water supply is regarded as unsatisfactory. E.coli is recommended to be <1. It was noted to be 1 at 35oC and 0 at 45oC. The "Interpretation of vales in relation to water quality guidelines for human consumption" notes that: If E.coli is present, suitable water treatment should be undertaken before water is used for human consumption.
2. The terms of the conciliated agreement were that the landlord was to obtain a "plain language" report in relation to the water quality.
3. The landlord provided a report from Swep Analytical Laboratories dated 18 October 2018 with associated fact sheets. This report provides no analysis of the data.
4. The evidence from Ms Molnar was that this subsequent sample was taken by the landlord from the larger tank on the adjoining premises and not from the interior of the house in accordance with the consent orders of the Tribunal.
5. The tenants have provided an email from a Senior Environmental Health Officer, NSW Health, who personally attended the residential premises and took the sample of the water from inside the house. The Tribunal finds that this evidence is to be preferred as he personally attended and took the sample from inside the premises and provided some analysis of the data. This data is also more indicative of issues in relation to the water tank on the residential premises.
6. The Tribunal is satisfied that the tenants have proved the landlord's breached its obligations under s 63 of the RT Act to perform repairs and keep the property in a reasonable state of repairs having established that the water at the residential premises is not of an acceptable standard for human consumption.
7. The tenants claim a rent reduction of $150 per week since the commencement of the tenancy and ongoing. However, the landlord was not on notice of any issues with respect of the water quality until 11 January 2018. Further, the tenant's evidence in relation to water purchase commences from May 2018.
8. Ms Bickerton's evidence was that as had concerns in relation to the cleanliness of the tank, she purchased bottled water. Prior to the hearing, the Ms Bickerton's evidence was that she had also purchased water and stored it in the tank for their use.
9. The receipts provided in the tenant's bundle of documents establish that the tenants purchased on average $22 per week of water for the period 8 May 2018 to the date of the hearing.
10. The tenants indicated throughout the hearing the financial difficulties that they were experiencing which placed additional strain on them to purchase the bottled water. The Tribunal accepts the genuine concerns for the health of the tenants' young family in relation to the quality of the drinking water and finds that it is reasonable that the tenants receive a rent reduction of $22 per week for the loss of use of the water. This rent reduction is applied from one week following the tenant putting the landlord on notice of their concerns of the water quality (18 January 2018) for a period of 12 months.
11. Further, the landlord is to compensate the tenants the sum of $400 for the damage and loss suffered by the tenants due to the landlord's breach of the RT agreement by failing to provide water of an acceptable quality.
12. The Tribunal finds that the tenants have established that the water tank requires cleaning to remove contaminates. At the hearing, the issue of cleaning the tank was not opposed by the agent to remedy the issue of the contaminated water.
13. The landlord is to undertake the cleaning of the water tank at the residential premises within twenty-one days of these orders.

Reimbursement of pest inspection report

1. The parties were directed to provide written submissions in relation to the basis for the Tribunal making an order for the cost of the pest inspection report.
2. Neither party addressed the basis that the Tribunal could make such an order as directed.
3. The tenants claim payment of the report on the basis that the report provided by the tenant established the breach pursuant to ss 52(1)(a) and 63 of the RT Act.
4. The landlord claims that the tenants haven't established a breach under the RT Act and is not required to pay the cost of the report.
5. The tenant claimed the cost of the pest inspection report in her initial application, however the conciliated agreement only provided for the landlord to undertake pest treatment. The tenant was represented by a tenant's advocate at the hearing of the initial matter.
6. The Tribunal finds that it can be inferred from the terms of the settlement that the tenants were no longer seeking payment of the pest report anymore and therefore the claim cannot be dealt with on the renewal application.
7. Further, the Tribunal finds that the pest inspection report was obtained for the purpose of the original proceedings and therefore concludes that the amount sought is costs of those proceedings.
8. Neither party suggested that the reimbursement of the pest inspection report was an application for costs of the proceedings. Special circumstances would be required to warrant an order for costs. As there were no submissions in relation to this issue, the Tribunal is satisfied that there are no special circumstances and makes no orders in relation to these costs.

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: 10 April 2019