The applicant is the landlord named in a residential tenancy agreement dated 8 December 2010. The respondent is the tenant under that agreement. The Tribunal has jurisdiction to determine the dispute between the parties by reason of the provisions of the Residential Tenancies Act 2010 NSW (the RTA).
The applicant's application is brought under regulation 9 of the Civil and Administrative Tribunal Regulation 2013 (the Regulation). That regulation confers on the Tribunal a power to set aside or vary its decisions in circumstances where a 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.
In this matter, the Tribunal made orders on 30 December 2014, following a hearing on 12 December 2014. The hearing occurred in the absence of the applicant (who we shall refer to as the landlord in these reasons). Those proceedings concerned an application brought by the respondent (who we shall refer to as the tenant) and the orders made by the Senior Member on 30 December 2014 are as follows (noting that the reference in the orders to the respondent is a reference to the landlord and the reference to the applicant is a reference to the tenant):
1. Order, pursuant to s 187(1)(d) of Residential Tenancies Act, 2010, that the Respondent pay $15,000.00 to the Applicant.
2. Order, pursuant to s. 187(1)(e) of the Residential Tenancies Act, that the Respondent forthwith undertake all necessary rectification works at the premises the subject of the residential tenancy agreement dated 8 December 2010 so as to rectify the cause of water penetration from the bathroom into the second bedroom of the premises, and in association with such works do all things necessary to remediate any and all consequential rising damp and mould affectation arising therefrom.
3. Order the Respondent to pay the costs of the Applicant of all applications, being SH 14/30566, SH 14/48047 and SH 14/49929, on the indemnity basis.
4. Grant leave to the Applicant to advance a further application for such costs to be made on a gross sum basis, unless such costs can be agreed between the parties, or they be assessed.
5. Direct that the Respondent is to show cause within 7 days of this order being published why it should not be referred to the President for consideration for further referral for contempt under s. 73 of the Civil and Administrative Tribunal Act, 2013 (the "NCAT Act"), or for the imposition of a civil penalty pursuant to s. 77 of that Act.
6. Direct that in association with the Respondent showing cause, an affidavit of facts, matters and circumstances is to be sworn or affirmed by the Chairman of the Respondent, and filed with the Tribunal giving the basis why the Respondent contends it ought be excused from such further referral.
7. Direct that the Chairman of the Respondent appear before the Tribunal to be examined upon the affidavit in association with that process of showing cause, and the transcript of that examination be made available to the President in any such consideration of the question of further referral.
As is apparent from the orders set out above the tenant successfully obtained an order that the landlord pay her $15,000 and costs. In addition, the landlord was required to comply with orders intended to address the question of whether consideration should be given to determining that the landlord had committed a contempt of the Tribunal.
The effect of Regulation 9 (3) is to require the landlord's application to have been filed by 7 January 2015. The landlord's application to set aside the orders of 30 December 2014 was in fact filed with the Tribunal on 30 January 2015. Accordingly, it is necessary for the Tribunal to grant an extension of time under section 41 of the Civil and Administrative Tribunal Act 2013 NSW (the Act) if the application is to be heard.
The landlord has complied with order 5 of the orders made on 30 December in that the landlord's submissions include submissions with respect to the question of contempt raised in the reasons published on 30 December 2014. The landlord has complied with order 6 made on 30 December 2014 by filing an affidavit of the Chairman of the landlord and the landlord has complied with order 7 by indicating to the Tribunal that the Chairman was available to appear before the Tribunal at the hearing of this application on 27 March 2015. As neither the tenant nor the Tribunal wished to cross examine the Chairman, the Chairman was relieved of the obligation to actually appear at the hearing.
The tenant initially commenced proceedings (SH 14/30566) against the landlord on 11 June 2014 seeking compensation by reason of the fact that the residential premises the subject of the agreement between the parties were partially unusable due to water ingress and mould. The Tribunal ordered the parties to file and serve evidence and those proceedings were heard on 15 September 2014. The landlord did not file any evidence and did not appear at the hearing. The decision of the Tribunal was to the effect that the landlord should pay to the tenant compensation in the sum of $3000.00. There was an additional order that the rent should be reduced to $280.00 per fortnight until certain work the subject of the tenant's complaint was rectified.
The Chairman's affidavit does not provide an explanation as to why evidence was not submitted for the hearing on 15 September. The Chairman's affidavit addresses the question of why a representative of the landlord was not present at the hearing and states that the relevant officer of the landlord was on annual leave. The landlord had requested an adjournment of the hearing and that request had been refused.
The Tribunal then received an application (SH 14/48047) from the landlord to set aside the Tribunal's decision of 15 September 2014 and that application was successful. The proceedings which lead to the decision of 30 December 2014 were then initiated (SH 14/49929) and there was a directions hearing on 7 November 2014. The Tribunal ordered the parties to file and serve their evidence. The landlord was required to file its evidence by 8 December 2014, but no evidence was filed. The Chairman's affidavit acknowledges the landlord did not file any evidence. The hearing occurred on 12 December 2014 and the landlord failed to appear at the hearing. The Chairman's affidavit says that it appears as if the landlord did not file evidence because of an oversight by the relevant officer. The Chairman's affidavit also states that it appears that the relevant officer of the landlord was not aware of the hearing date and that there were inadequate mail receipting procedures in place in the office of the landlord at the relevant time.
The Chairman's affidavit goes on to record that the history of the matter has been unsatisfactory and that steps have been taken within the office of the landlord to improve their practice and procedures and to require the appropriate priority to be given to Tribunal orders. In addition the Chairman reported in the affidavit that one of the landlord's officers has been commissioned to provide recommendations for improvements and to report back to the board of the landlord.
[2]
The landlord's case to have the decision of 30 December 2014 set aside
The landlord submitted that it was appropriate for the Tribunal to set aside the orders made on 30 December 2014 and it substantially relied upon the evidence of its representative, Ms Pinkstone who had filed an affidavit dated 17 February 2015.
During the course of the hearing Ms Pinkstone made a number of significant concessions on behalf of the landlord. The first was that in respect of a very substantial period since the tenancy commenced the premises had been subjected to water penetration. Ms Pinkstone conceded that the tenant's complaints concerning water penetration were to be acknowledged at least for the period from 6 December 2012 until December 2014. Ms Pinkstone said that some minor works were still required to be undertaken and that recently (February and March 2015) other work had been completed which included the laying of replacement carpet. Broadly speaking, Ms Pinkstone's concession was that the tenant was entitled to compensation for a period of approximately two years (December 2012 to December 2014) on the basis that 20% of the premises was not fit for use or habitation. Ms Pinkstone submitted that the appropriate calculation for such compensation was to take the average rent paid by the tenant (approximately $155.00 per week) for two years and that the award should be for 20% of the resulting figure. In addition Ms Pinkstone acknowledged that the tenant should be given some compensation for costs incurred by her in storing her property, some relocation costs and the costs of replacement mattresses.
Ms Pinkstone submitted that the calculation made by the Tribunal in its decision of 30 December 2014 contained an error in that the senior member calculated compensation by reference to the actual market rent of the premises rather than the amount paid by the tenant. The landlord is a social housing provider and the tenant is a social housing tenant. This means that the rent provided for in the agreement (which is $620.00 per week) is not actually paid by the tenant provided that the tenant's income meets the criteria established by the landlord. In this case the tenant qualified for reduced rent and actually paid rent of an amount which varied but on average was $155.00 to $160.00 per week. Ms Pinkstone submitted that the calculation made in the decision of 30 December 2014 was a calculation of 20% of a figure which was never paid by the tenant, whereas it should have been 20% of the figure actually paid by the tenant.
[3]
The tenant's submissions
The tenant submitted that the ingress of water causing mould occurred from the beginning of the tenancy. The tenant said that the second bedroom wall was wet from January 2011. She acknowledges that she did not explicitly advise the landlord of that observation until 6 December 2012, when she forwarded an email to the landlord. She submitted that prior to 6 December 2012 she had made phone calls seeking to have the landlord address the situation.
The tenant also states that all of the work has not yet been completed and she identified a number of small items which she stated still require to be rectified.
The tenant also submitted that the calculation of compensation made by the senior member was correctly made.
[4]
Application to extend time
This application was required to be made on or about 7 January 2015 but was not made until 30 January 2015. Accordingly the Tribunal must extend time pursuant to its power under s41 of the Act if it is to allow the application to proceed. As the Tribunal has indicated in earlier decisions (see for example Jackson v. NSW Land and Housing Corporation [2014] NSW CATAP 22) the discretion to extend must be exercised judicially and having regard to the requirements of s36 of the Act which provide for the Tribunal to act in a way which facilitates the "just, quick and cheap resolution of the real issues in the proceedings". One of the requirements in considering whether to extend time is to ask whether strict compliance with the rules will work an injustice upon the applicant (see Gallo v. Dawson [1990] HCA 30). It is the opinion of the Tribunal that the calculation of the damages in the decision of 30 December 2014 contained an error and for that reason alone it would be unjust to refuse to extend time. Accordingly, the Tribunal will grant leave to the landlord to file its application later then the period required under regulation 9.
[5]
The case which was not adequately put
The basis for the above decision to extend time is that the Tribunal accepts the landlord's submission that the appropriate measure of calculating the tenant's loss is by reference to the amount the tenant actually paid and was obliged to pay provided the tenant met the landlord's criteria which enabled the tenant to pay a lesser rent than that contained in the tenancy agreement by reason of the rent rebate scheme operated by the landlord. Such schemes are recognised in the RTA (see part 7 of the RTA). This approach is consistent with the well accepted principle for the calculation of damages for breach of contract, namely damages should put the party affected by the breach into the same position as if the agreement had been performed as promised (see Clark v Macourt [2013] HCA56 referring to Robinson v Harman (1848) 1 Exch 850).
In large measure the landlord acknowledges the merits of the tenant's case and at the hearing the landlord's representative explicitly made it clear that the tenant was entitled to compensation for the two year period from December 2012 to December 2014. The landlord argued that there was no evidence of water ingress in the period prior to December 2012 and that compensation should not be awarded in respect of any period beyond December 2014. However, the landlord's representative also acknowledged that some work was still being undertaken in the early part of 2015, which had not been completed until 19 March 2015. The tenant submitted that the damage commenced before December 2012 and gave some evidence as to what she had observed during that period. The tenant also asserted that there remains some small amount of work still to be undertaken. There was also the storage costs and other associated damage which the tenant suffered and which the landlord acknowledged. The decision of 30 December 2014 identified the tenant's claim in this respect as totalling $1,545.53.
If it were not for the fact that the calculation of damages made in the order of 30 December 2014 was made on an incorrect basis, we would be inclined not to set aside that decision. This is partly because the landlord's case largely does not conflict with the tenant's case. The landlord very substantially acknowledges the merits of the tenant's complaint. Furthermore, the landlord's conduct in omitting to file evidence in July and December 2014 and its conduct in failing to appear at the Tribunal hearings in September and December 2014 generally make it inappropriate to give to the landlord yet another opportunity to present its case when the earlier opportunities had been ample.
However, if the decision of 30 December 2014 were left as it is there would be a resulting injustice to the landlord. Accordingly it is the decision of the Tribunal that it should exercise its discretion to set aside the order of 30 December 2014 and to substitute for that order, the orders which we set out below.
We find that the tenants assertions that there was water ingress prior to 5 December 2012 is not supported by sufficient evidence to justify including that period in an award for compensation. The first clear evidence supporting the tenant's assertion is her email of 6 December 2012. The Tribunal is satisfied that the tenant has not been able to use a portion of the premises by reason of the landlord's breach from December 2012 until December 2014. At the hearing both sides accepted that the extent of the breach rendered approximately 20% of the premises uninhabitable. On the basis that the tenant paid on average $160.00 per week it is the view of the Tribunal that the tenant should have compensation of $32.00 per week for approximately 104 weeks, which totals $3,328.00.
In addition the tenant is entitled to compensation for storage and mattress costs as claimed (and conceded by the landlord). The senior member's decision recorded that tenant spent $1,545.00 on storage costs. The tenant's affidavit dated 24 November 2014 stated that the tenant intended to spend $2,239.00 on new mattresses. The tenant is not entitled to claim the cost of new mattresses in the place of old mattresses. Having regard to the evidence of the tenant we think the appropriate course is to award the tenant an amount of $2,500.00 as compensation for storage costs and the value of the damaged mattresses. This figure plus the figure earlier mentioned of $3,328.00 brings the amount to be awarded to $5,828.00
[6]
Costs
The relevant provisions of the Act concerning costs are contained in s60 of the Act. With respect to proceedings in this division of the Tribunal, clause 38 of the Rules is relevant in some circumstances but not in this case. S60 requires there to be special circumstances before an award for costs can be made. In determining whether there are special circumstances warranting an award for costs the Tribunal may have regard to those matters set out in s60 (3). They are as follows:
1. In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following:
1. whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,
2. whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,
3. the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,
4. the nature and complexity of the proceedings,
5. whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,
6. whether a party has refused or failed to comply with the duty imposed by section 36 (3),
7. any other matter that the Tribunal considers relevant.
It is arguable that one or more of the above provisions may be applicable in this case as the proceedings have been protracted and the tenant has been successful on three separate occasions. In the circumstances the conduct of the landlord has unnecessarily and unreasonably prolonged the proceedings. Accordingly it is the view of the Tribunal that the tenant's costs should be paid by the landlord.
[7]
Contempt
Orders 5, 6 and 7 of the orders made on 30 December 2014 were directed toward the question of whether the landlord should be referred to the President of the Tribunal for contempt.
It is the view of the Tribunal that the Chairman of the landlord has adequately shown cause by the contents of her affidavit as to why the landlord should not be referred to the President for consideration for referral for contempt.
Although the Chairman's affidavit acknowledges shortcomings, poor management and neglect by some executives of the landlord, the conduct of the landlord's executives was not in our view of a deliberate, intentional or reckless character sufficient to justify referral to the President for the purpose of examining whether the landlord should be charged with contempt. To some extent the landlord's executive's conduct was occasioned by a mistaken view of the landlord's legal obligations to the tenant in circumstances where the landlord (which leased the premises) was not able to effect repairs without the cooperation of its landlord. In addition we have had regard to the Chairman's description of the efforts being made by the landlord to improve its conduct of Tribunal proceedings.
We think it appropriate to add that it was inappropriate for the senior member to conclude, as he did, that the landlord's conduct was in contempt of the Tribunal, disgraceful and contumelious in circumstances where the Chairman's affidavit had been ordered but not received. Such language which reflects findings of significant gravity would have been more appropriately deferred until the receipt of the Chairman's affidavit.
For the above reasons the Tribunal will make the following orders:
1. Orders 1, 2, 3, 4 made on 30 December 2014 in proceedings SH 14/49929 are set aside
2. The applicant is to pay the respondent the sum of $5828.00 within 7 days
3. The applicant is to pay the respondent's costs incurred in proceedings SH 14/30566, SH 14/48047, SH 14/49929 and SH 15/05034 as agreed or if not agreed as assessed.
[8]
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: 07 July 2015