Black v NSW Land and Housing Corporation

Tribunal's decision 4There is no dispute as to the facts. The residential tenancy agreement was in writing and constituted the terms of the agreement when the tenancy commenced. It expressly provided that there was no storage space available to Ms Black. Subsequently there was an oral agreement between the landlord and Ms Black that she could use the storage space in the foyer of the building. No money was paid and no period was specified. On 1 May 2014 the landlord changed the lock to the storage area denying Ms Black access. 5Ms Black's application to the Tribunal was for an order under s 187(a) of the Residential Tenancies Act 2010 (NSW) "that restrains any action in breach of a residential tenancy agreement." The fundamental question for the Tribunal was whether the action of the landlord in changing the lock and denying Ms Black access to the storage unit was "in breach of the residential tenancy agreement". 6In concluding the residential tenancy agreement had not been breached, the Tribunal made the following findings: (1)the storage area was specifically referred to in the residential tenancy agreement as being excluded; (2)the storage area was situated in what could be described as a common area near the front entry; (3)the applicant paid no fee for the use of the area; (4)there is no documentation to support the claim that the applicant had exclusive use rights of the storage area; (5)there was no evidence that the applicant had agreed to vary the residential tenancy agreement to include the storage area and while it was always open to the applicant to approach the respondent to request that the tenancy agreement include the storage area, this had not occurred; (6)there was no implied or oral term in the residential tenancy agreement that the storage area was included as part of the residential premises; (7)the arrangement was not a term of the residential tenancy agreement but was rather a separate licence to use the storage space that could be terminated at any time.

Grounds of appeal 7Because Ms Black is appealing against a final decision, she has the right to appeal on a question of law. She also applied for leave to appeal on other grounds: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 80(2)(b). Because this is an appeal from a decision of the Consumer and Commercial Division, the grant of leave is also regulated by Schedule 4 Clause 12 of the NCAT Act which provides that: An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a)the decision of the Tribunal under appeal was not fair and equitable, or (b)the decision of the Tribunal under appeal was against the weight of evidence, or (c)significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

Grounds of appeal 8Ms Black filed a Notice of Appeal which stated the grounds of appeal to be that "significant weight of evidence was not given to the actions" of the landlord and the landlord's "conduct indicated an agreement to modify the agreement." In written submissions in support of these grounds, her representative elaborated on this ground. 9In summary, our understanding of the grounds of appeal were that: (1)The Tribunal should have accepted that the landlord's conduct meant that an oral term could be implied into the residential tenancy agreement that Ms Black has an exclusive right to use the storage unit. (2)It follows that the Tribunal was incorrect to conclude that Ms Black's use of the storage unit was "subject to a licence which could be terminated by the landlord at any time". (3)Alternatively, there was an obligation on the landlord to "repair the lock" which had ceased to function and its operation should be reinstated; (4)The landlord is prevented from terminating the agreement because of the doctrine of promissory estoppel. (5)The Tribunal did not act in accordance with the 'guiding principle' in s 36(1) of the NCAT Act, nor did it act "according to equity, good conscience and the substantial merits of the case' in accordance with s 38(4) of the NCAT Act. (6)The claim is a consumer claim under the Consumer Claims Act and an order should be made for the supply of services, namely the provision of access to the storage space.

Was there a breach of the residential tenancy agreement? 10A residential tenancy agreement may be express or implied and may be oral or in writing, or partly oral and partly in writing: Residential Tenancies Act, s 13(2). It is not a requirement of a residential tenancy agreement that it grant a right of exclusive occupation. But a residential tenancy agreement must be "for value" and must relate to "a right of occupation of residential premises for the purpose of use as a residence." 11The only basis on which it was submitted that the Tribunal was wrong to conclude that there was no breach of the residential tenancy agreement was that its finding was against the weight of evidence. Ms Black submitted that the Tribunal did not give sufficient weight to the oral agreement between herself and the landlord or to the landlord's conduct in allowing her to use the storage unit for over 10 years. Therefore the appellant requires leave to appeal and must satisfy the Tribunal that she may have suffered a substantial miscarriage of justice in accordance with the provisions of Sch 4 cl 12. 12There is no dispute the residential tenancy agreement expressly excluded the use of the storage space. 13The decision that the Tribunal reached that the right to use the storage area was not a term of the residential tenancy agreement, was not against the weight of evidence for the following reasons. 14A term will not be implied into a contract where it would contradict an express term: BP Refinery (Westernport) Pty Ltd v Hastings Shire (1977) 180 CLR 266 at 283. In the present case, the storage area was expressly excluded and to imply the term asserted by Ms Black would contradict this term. Therefore this ground fails. 15An agreement which contradicts an express term of the contract may vary the contract where the rules for contract formation (offer acceptance and consideration) are satisfied: N C Seddon and M P Ellinghaus, Cheshire & Fifoot's Law of Contract, (9th Aust ed, 2008) at [4.32]. Unilateral variation without consideration will be ineffective: Sundell & Sons Pty Ltd v Emm Yannoulatos (Overseas) Pty Ltd (1955) 56 SR (NSW) 323. 16No money was paid for use of the storage space and no other 'consideration' was provided. Accordingly, the Tribunal was correct to conclude that the residential tenancy agreement had not been varied. The fact that the landlord had allowed Ms Black to use the storage unit for over 10 years and was not a stranger to her did not vary the residential tenancy agreement either expressly or impliedly. 17It follows that the agreement that Ms Black could use the space was not a term of the residential tenancy agreement. 18Consequently, the claim to "repair" or reinstate the lock because there has been a breach of the residential tenancy agreement by the landlord to maintain the residential premises under the residential tenancy agreement must also fail.

Promissory estoppel 19Ms Black submitted that the landlord was estopped from denying that she has a right under the residential tenancy agreement to use the storage area. While this was not a submission that the Tribunal addressed in its reasons, the landlord's representative agreed that it had been raised at first instance. 20According to Ms Black, by reason of the decision in Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, the Tribunal should have concluded that: (1)the landlord represented that she could use the storage space after the date the residential tenancy agreement was entered into; and (2)she relied on that representation; and (3)she acted to her detriment. 21The acts of reliance were "(Ms Black) acquired things that would not fit in her small one bedroom premises, in order to more fully engage in the lives of her grandchildren." The detriment was said to arise because "(Ms Black) will be strongly inconvenienced, either in the use of her premises or in the interaction with her grandchildren". 22These submissions cannot succeed for several reasons. Firstly, the representation asserted in connection with the use of the storage space was made after a residential tenancy agreement had been signed. This agreement expressly recorded that there was no storage space provided as part of that agreement. Therefore it was not a representation leading to the assumption that the residential tenancy agreement would, when signed, contain a right to use the storage space. 23Secondly, the terms of the agreement to use the storage space and the facts of reliance and detriment asserted by Ms Black do not amount to a representation that the terms of the residential tenancy agreement originally signed were to be varied to include an ongoing right under that agreement to use the storage space for the term of the residential tenancy agreement. 24The submission in relation to estoppel fails.

Guiding principle and 'equity and good conscience' provision 25Alternatively, Ms Black submitted that the Tribunal made an error of law because it did not decide her case in accordance with the 'guiding principle' in s 36(1) of the NCAT Act or "according to equity, good conscience and the substantial merits of the case" as provided for in s 38(4) of the NCAT Act. 26Section 36(1) states that: (1) The "guiding principle" for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: (a) exercises any power given to it by this Act or the procedural rules, or (b) interprets any provision of this Act or the procedural rules. 27The Tribunal is required to "exercise its powers" and "interpret any provisions" in accordance with the guiding principle. But the "just, quick and cheap resolution of the real issues in the proceedings" does not require the Tribunal to interpret or apply the law otherwise than in accordance with correct legal principles. 28The "equity and good conscience" clause is in s 38(4) of the NCAT Act: The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. 29The history and meaning of equity and good conscience clauses was examined by Professor Neil Rees in an article entitled, Procedure and evidence in 'court substitute' Tribunals (2006) 28 Australian Bar Review 41. Professor Rees notes that it has been suggested that this provision could give the Tribunal power to decide all cases by reference to moral standards, to concepts of what is fair and right, rather than by reference to rules of law. He goes on to express the view, with which we agree, that that is not how it has been interpreted in recent times: Sue v Hill (1999) 199 CLR 462; 163 ALR 648 at [42] and [149]. For the purpose of this decision it is not necessary to determine the precise nature and extent of the obligations imposed on the Tribunal under s 38(4). It is sufficient to record that the section does not relieve the Tribunal from the obligation to determine a case according to law. 30Ms Black did not make a claim before the Tribunal under the Consumer Claims Act that the right granted to use the space was one granted by a supplier (landlord) to a consumer (Ms Black). Because that cause of action was not before the Tribunal Ms Black cannot raise it for the first time on appeal.

Orders 31We make the following orders: (1)The time to file the Notice of Appeal is extended to 29 August 2014. (2)Application for leave to appeal is refused. (3)The Appeal is dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 23 December 2014