This is an appeal brought by the former tenant under a residential tenancy agreement, which is regulated by the provisions of the Residential Tenancies Act 2010 (NSW) (the RT Act). The Respondent to the appeal is the landlord under that tenancy agreement.
The appeal arises out of a decision published on 28 July 2022, which determined an application lodged by the landlord for termination of the tenancy and an order for payment of rent arrears. The Tribunal's orders included an order terminating the tenancy on the grounds of failure to pay rent, an order for possession and an order for payment of arrears totalling $9,285.90. The arrears were determined to run from 21 March 2022 to 28 July 2022.
The decision under appeal (which we shall refer to as the Decision) discloses that the tenant opposed the orders sought upon the basis that the Tribunal did not have jurisdiction because the tenant was occupying the premises as agent of a mortgagee in possession pursuant to a subrogated mortgage. The RT Act excludes from its regulation agreements that arise under a term of a mortgage that confers a right to occupy residential premises: see s 8(1)(g) of the RT Act.
The Tribunal found that the landlord's Notice of Termination on the basis of rent arrears was served on the tenant on 4 April 2022 and at that time the tenant was more than 14 days in arrears in the payment of rent. The Tribunal found that the Notice of Termination was valid. In coming to that finding the Tribunal considered and rejected the tenant's reliance upon s 8(1)(g).
The tenant lodged a Notice of Appeal within the requisite time period. As we explain later, the essence of the appeal is the contention that the subject premises were, during the relevant period, uninhabitable and that accordingly no rent was payable. This issue was neither the subject of submissions before the Tribunal at first instance, nor is it referred to in the Decision. In order to understand how it is possibly relevant to the appeal it is necessary to set out some of the background facts.
[2]
Background Facts
On 16 March 2022 the landlord served on the tenant a Notice of Termination alleging that the property was uninhabitable (relying upon s 109 of the RT Act) and constituted a safety risk. The notice stated that the rent was then paid to 3 April 2022 and that possession was required by 18 March 2022. The notice further stated that, once the keys were returned, any rent paid past 18 March 2022 would be refunded. We divert to make the observation that any refund arguably should not have been calculated by reference to the date possession was given but, rather, from the earlier date that the landlord considered to be the date from which the premises became uninhabitable.
There is evidence that the tenant took a contrary view, namely that the premises were in fact habitable. The tenant has filed a bundle of documents in the appeal (the bundle) which were before the Tribunal at first instance. It included a chronology of events prepared by the tenant. That chronology stated that on 22 March 2022 the tenant opposed the notice given by the landlord (see p28 of the bundle).
On 4 April 2022 the landlord issued another Notice of Termination, this being the one that was the subject of the Decision. As stated earlier, it alleged that the tenant was in arrears of rent.
The landlord had also commenced an application in the Tribunal seeking a termination order under s 109 of the RT Act relying upon the s 109 notice referred to above.
On 8th April 2022 the tenant lodged an affidavit with the Tribunal in which she swore that the premises were not in her opinion uninhabitable (p49 of the bundle).
On 26 April 2022 the tenant swore an affidavit (which was lodged with the Tribunal) in which the tenant described the Notice of Termination under s 109 as "anticipatory" and "retaliatory". The tenant also described the premises as having been kept spotlessly clean (p108 of the bundle).
On 28 April 2022 the landlord withdrew the application under s 109. The landlord had also by then commenced proceedings relying upon the second Notice of Termination (concerning rent arrears) and these proceedings were heard and determined in favour of the landlord on 28 April 2022 but in the absence of the tenant. The tenant made an application to set aside those orders.
On 4 May 2022 the tenant swore a statutory declaration (see p40 of the bundle). In that statutory declaration, the tenant referred to events before the Tribunal and stated that on or about 28 April 2022 she became aware that the termination notice under s 109 had been "withdrawn" by the landlord. What in fact appears to have been withdrawn was the landlord's application relying upon the s 109 notice. This is apparent from the letter from the tenant dated 24 May 2022 (see p142 of the bundle).
By letter dated 24 May 2022 the tenant wrote to the Tribunal in support of the set aside application. In that letter the tenant explained why she was not in attendance at the tribunal in late April. That was because she had understood the landlord's applications had been withdrawn whereas in fact only the s 109 application had been withdrawn. It appears that the set-aside application was successful because the landlord's application was heard again and determined on 28 July.
The tenant lodged a Notice of Appeal on 2 August 2022. An application for a stay was made by the tenant. The application was unsuccessful but the tenant has not paid any of the arrears of rent. On 2 November 2022, the appeal was dismissed by reason of the tenant's non-appearance. The tenant then made an application to reinstate the appeal.
It is also relevant to state that, on 29 August 2022, a warrant for possession was executed in relation to the premises founded on a then unstayed order for possession.
[3]
The Notice of Appeal
The grounds of appeal describe in narrative form some of the background facts. The tenant referred to s 112 of the RT Act, which requires that a Notice of Termination given pursuant to s 109 be withdrawn only with the consent of both parties. The tenant claims that the landlord unilaterally withdrew the notice on 28 April 2022.
The essence of the tenant's grounds of appeal is to the effect that the landlord having, by the first Notice of Termination, declared the premises to be uninhabitable was no longer entitled to rent and that, accordingly, the subsequent Notice of Termination (relying upon arrears of rent) could not be valid since rent was not payable. The tenant claims to be entitled to complete abatement of rent since it arose after date of the first Notice of Termination. The tenant stated that an application for abatement of rent had been lodged with the Tribunal but was not able to tell us with clarity what the current status of that application was.
In addition, at the hearing of the appeal, the tenant claimed that the second Notice of Termination was also defective upon the basis that, at the time it was issued, rent in arrears was not more than 14 days in arrears.
[4]
Respondent's Submissions
The position of the landlord is summarised in the following paragraphs.
The landlord contended that the second Notice of Termination was valid because rent was in fact more than 14 days in arrears when the notice was given. We were taken to the hearing notes relied upon at first instance (see p118 of the bundle) which stated that the rent had been paid to 20 March 2022 and that the date of the last payment of rent was 28 February 2022. The bundle also included a rental ledger. The Decision included the finding that payments of rent after 28 February had been dishonoured.
The landlord drew our attention to the authority in Water Board v Moustakas (1998) 180 CLR 491 where the High Court stated that a point cannot be raised for the first time upon appeal when it could possibly have been met by calling evidence below. Where all the facts have been established beyond controversy or where the point is one of construction or of law then a court of appeal may find it expedient and in the interests of justice to entertain the point, but otherwise the rule is strictly applied. The principle in the Water Board case has been applied in McInnes v Rheem Australia Pty Ltd [2021] NSWCA 89 where the court at [44] said that a party is bound by the conduct of his or her case. The Court approved this statement from another judgment of the High Court: "Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case has been decided against [the party], to raise a new argument which, whether deliberately or by inadvertence,[the party] failed to put" at first instance.
In this case, the tenant has left the premises following execution of a warrant for possession. Clause 12(2)(b) of schedule 4 to the Civil & Administrative Tribunal Act 2013 (NSW) (the NCAT Act) provides that an appeal against an order for termination of the tenancy under the RT Act where a warrant of possession has been executed in relation to that order is not competent except on a question of law.
The landlord submitted that the tenant has advanced a fresh argument not previously raised for consideration by the Tribunal at first instance and that the tenant has not identified any question of law. Accordingly, the appeal is incompetent, by operation of clause 12(2)(b) of the schedule 4 to the NCAT Act. Before the Tribunal, the tenant did not contend that she had paid more rent than she was obliged to pay and/or that she was entitled to compensation due to the uninhabitable condition of the premises such that it caused the termination notice relying upon arrears of rent to be defective.
The landlord further submitted that the Appeal Panel has no discretion to entertain the appeal unless it is satisfied that the grounds of appeal raise a pure question of law and that the grounds of appeal do not disclose a question of law.
In addition, the landlord claims costs and has submitted that special circumstances exist warranting an award of costs. Special circumstances exist where a party has advanced a weak or futile case: Chester v Prestige Promotions Pty Ltd [2014] NSWCATAP 34. The landlord further submitted that indemnity costs should be awarded relying upon the decision in Mendonca v Tonna [2017] NSWCATAP 176 at [59]-[64]. In that case, the Tribunal found that an award of indemnity costs may be made for unreasonable conduct.
The landlord submitted that she had made an offer to accept a lower sum than ordered in the Decision and that that offer had been rejected by the tenant.
The landlord seeks orders to the effect that the appeal be dismissed and that the landlord's costs both of the stay application heard on 7 September 2022 and the costs of the appeal be paid by the tenant on an indemnity basis, or in the alternative, on the ordinary basis.
[5]
Consideration
At the hearing of the appeal, we considered the tenant's application to reinstate the appeal. We made an order for reinstatement and gave reasons orally for so doing.
Where an appeal is against an order of the Tribunal for the termination of the tenancy under the RT Act and a warrant of possession has been executed in relation to that order, then an appeal may only be made on a question of law (as of right) and not on any other grounds (even with leave): see clause 12(2)(b) of schedule 4 to the NCAT Act).
The tenant does not contend that the Decision contains or reveals any error of law and in that sense the appeal does not raise any question of law. That is because the issue argued by the tenant, at first instance, was that the Tribunal did not have jurisdiction to terminate the tenancy by reason of s 8(1)(g) of the RT Act. There was evidence before the Tribunal that the landlord had issued a s 109 Notice of Termination, that the subsequent application relying upon that notice had been withdrawn and that the tenant had contested the efficacy of the notice because, in the tenant's view, the premises were in fact habitable. However, those issues were not the subject of submissions before the Tribunal at first instance. At the hearing of the appeal Mr Whitehall (for the tenant) said that the issue of s 109 had been raised before the Tribunal. He did not provide evidence in support of that contention, such as the transcript of the hearing at first instance.
In the course of the appeal, the tenant sought to argue that the s 109 Notice of Termination could not be withdrawn unilaterally. Section 112 of the RT Act provides that a party who gives a termination notice may, at any time, revoke a notice with the consent of all other parties to the residential tenancy agreement. It is clear that the conduct of the tenant was to argue that the s 109 notice was not valid and when the landlord withdrew the application relying upon that notice the tenant made no objection to that withdrawal. The landlord has not expressly withdrawn or revoked the Notice of Termination but has acted inconsistently with that notice by claiming rent. The tenant has not expressly consented to the revocation of the Notice of Termination but has contended that the notice was not efficacious because the premises were in fact habitable. There is nothing in s 112 that prevents consent being inferred from such circumstances.
Section 118 of the RT Act provides that a landlord or tenant who gives a termination notice may, if the notice is revoked, give a further notice on the same or a different ground or, if the notice is not revoked, give a further notice on a different ground.
In our view, the landlord was at liberty to withdraw the s 109 application and was able to proceed upon the second notice of the of termination alleging arrears of rent. That conduct is consistent with s118. The issue of the s109 Notice of Termination may have constituted an admission by the landlord that the premises were uninhabitable but that argument was never raised by the tenant at first instance because she held the contrary view. In our view even if the Notice may be said to be an admission it was not an admission to which the landlord was irrevocably bound. In circumstances where the tenant put forward at the time a contrary view, if the issue had come before the Tribunal then the Tribunal would have been required to determine whether the premises were in fact uninhabitable by considering all of the relevant evidence, not just the Notice of Termination.
A question arises as to whether the s 109 notice has been revoked or not. In our view, the conduct of both parties is consistent with the conclusion that the landlord revoked the notice and that the tenant's conduct constituted consent to that revocation, being implied from the tenant's conduct at the time and the fact that withdrawal in the face of opposition achieved without further contest what the tenant at the time was contending. However, that conclusion is not germane to the resolution of this appeal because this appeal concerns whether the tenant is now able to put forward the contention that the second Notice of Termination alleging arrears of rent was invalid because the premises were uninhabitable.
We are in agreement with the landlord's submissions that, generally speaking, a point cannot be raised for the first time on appeal, and that in this case, the tenant is bound by the way she defended the proceedings leading to the Decision. Not only did the tenant not argue that rent was not payable by reason of the premises being uninhabitable, but the tenant expressly, by correspondence, contended that the premises were habitable. This view (that is, the tenant cannot raise the s109 point on appeal) is consistent with the principles enunciated by the High Court in the two cases cited by the landlord and in particular the comments of the High Court in the McGuinness case (earlier referred to).
In Coulton v Holcombe (1986) 162 CLR 1, the High Court considered circumstances which might lead to permission being granted for new arguments to be raised on appeal that had not been raised at first instance. Considerations relevant to entertaining a new argument included whether the issues before the parties had wider ramifications (ie. to others in a similar position), or whether the interests of the community would be served by an authoritative determination of the question sought to be raised on appeal. in our view these considerations do not apply in this case. The dispute between the landlord and tenant is now essentially based upon the facts concerning the alleged uninhabitability of the premises. On the one hand, the s 109 notice may be interpreted to be an admission by the landlord of the premises being uninhabitable. On the other hand, the subsequent conduct of the landlord may also be seen to be recognition that the tenant's contention that the premises were habitable was a contention having force. At [15] the High Court decided to deny the relevant party the opportunity to raise fresh arguments on appeal and said that it would "not be fair to the appellants to subject them ….. to what is virtually a new trial on an entirely different issue to that which had been litigated. In the pursuit of such a course, the interests of expedition, finality and justice are denied".
In our view, it is not in the interests of justice, particularly having regard to the obligation of the Tribunal to resolve disputes justly, quickly and cheaply, now to let the tenant raise the s 109 point on appeal in circumstances where it was not raised below, could have been raised and where, to the extent that it was raised in correspondence issued by the tenant to the landlord, the tenant took the view which is inconsistent with the view that she now takes.
In any event, we are not satisfied that the point that the tenant now seeks to raise involves a question of law. We are of the view that the Decision does not demonstrate any error of law and that the tenant should not be given leave to raise the issue of the alleged uninhabitability of the premises for the first time on appeal.
We refer to the tenant's contention that rent was not 14 days in arrears when the second Notice was served on 4th April 2022. The Tribunal expressly found that the tenant was more than 14 days in arrears as at 4th April and that payments after 28th February were dishonoured. We were not taken to evidence that may have contradicted those findings. In any event this contention does not raise a question of law. This ground of appeal is rejected.
Accordingly, the appeal must be dismissed.
The landlord has made an application for costs. As the landlord's submissions demonstrate, it is necessary for the landlord to satisfy us that there are special circumstances warranting an award of costs as required by s 60 of the NCAT Act. Two arguments have been put forward. The first is that the landlord made an offer to accept a lower sum than ordered in the Decision and that the tenant rejected such offer. The second ground is that the appeal has had very low prospects of success. We note that leave was granted to the landlord to have legal representation.
We are of the opinion that the circumstances of this case are not sufficient to warrant an award of costs. Section 112 of the RT Act provided some basis for the tenant to put forward the argument that the landlord's conduct was inconsistent in that she first alleged the premises were uninhabitable (thus making it arguable that no rent was payable), and then took the view that rent was payable but was in arrears. To some extent, the landlord's own inconsistent conduct has given rise to the tenant being able to put forward a basis for the appeal. This is not to say that the appeal has any merit (we have already concluded otherwise), but in our view it would be unreasonable to conclude that the tenant's prospects were so poor as to warrant an award of costs. In addition, simply because a compromise offer was put by the landlord and was rejected by the tenant does not necessarily lead to the conclusion that there should be a finding of special circumstances warranting an award of costs.
In the circumstances, we are inclined to the view that there should be no order for costs. The landlord's application for costs is dismissed. The conclusion above does not derogate from any existing orders for costs made in respect of this appeal or the earlier status of the appeal which was dismissed for non-appearance.
We make the following order:
1. Appeal dismissed.
[6]
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
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Decision last updated: 14 December 2022