This decision concerns an appeal filed on 13 February 2017 from a decision made in the Consumer and Commercial Division of the Tribunal. The Notice of Appeal is stated to be an appeal from a decision made on 21 September 2016 (which as explained below is an error and should have referred to 21 November 2016).
The factual background giving rise to the appeal and developments since the Notice of Appeal was filed on 13 February 2017, must be explained in order to understand the issues which came before us for our consideration. The chronology of events is set out in the following paragraphs.
The parties had entered into a residential tenancy agreement. The appellants are the tenants and the respondents are the landlords.
On 2 November 2016 the Tribunal made orders for the residential tenancy agreement between the parties to be terminated on 31 January 2017. Orders were also made pursuant to s 187(1)(d) of the Residential Tenancies Act, 2010 (RT Act) that the landlords should pay to the tenants sums of money on or before 9 November 2016. There were five such orders. Two of the orders described the amounts to be paid as a reduction of rent under s 44(1)(b) of the RT Act. In addition, there was an order for the landlords to undertake certain repair work. Finally, there was an order that the tenants should pay no rent from 3 November 2016 to the date of vacation.
On 21 November 2016 the Tribunal published further orders. Those orders made reference to s 63 of the Civil and Administrative Tribunal Act 2013 (NCAT Act) which concerns the power to correct errors. The effect of the orders made on 21 November 2016 was to:
1. Amend the orders of 2 November 2016; and
2. Recalculate the sums of money payable by the landlords to the tenants by limiting the reduction in rent to a period of 52 weeks. Under the orders of 2 November 2016 the total amount payable by the landlords to the tenants was $17,200.00 and by the orders of 21 November 2016 that amount was reduced to $12,800.00.
A further effect of the orders made on 21 November 2016 was to set aside order 8 of the orders made on 2 November 2016, thus setting aside the order permitting the tenants to pay no rent for the period from 3 November 2016 to the "date of vacation".
It is necessary to add that part of the dispute between the parties has already been resolved in the sense that an Appeal Panel decision was published on 10 March 2017 (Bridgford & Anor v Brien & Ors [2017] NSWCATAP 54) which decided some issues. We shall refer to that decision as the "Appeal Panel decision of 10 March 2017".
We were informed at the appeal hearing that the parties were not given any opportunity to make submissions concerning whether the orders of 2 November 2016 ought to have been amended. In other words, the amended orders of 21 November 2016 were made unilaterally without the parties' involvement.
The next relevant event is that on the 29 December 2016 the Tribunal published written reasons for its decision. That apparently occurred because a request had been made for a written statement of reasons under s 62 of the NCAT Act.
The reasons published on 29 December 2016 appear to contain a typographical error in that they refer to a decision made on 21 September 2016 and 2 November 2016. It appears to us that the correct dates were 2 November 2016 and 21 November 2016. In any event, the substance of the orders made on 29 December 2016 was the same as the orders made on 21 November 2016.
In summary therefore, the Tribunal made orders dealing with the same subject matter on 2 November 2016, 21 November 2016 and 29 December 2016. The full text of both of the November orders is set out in the Appeal Panel decision of 10 March 2017.
Following the lodgement of the Notice of Appeal the appeal came before Principal Member Harrowell who published a decision and made orders on 10 March 2017 (i.e. the Appeal Panel decision of 10 March 2017). The effect of that decision may be summarised in these terms:
1. The Principal Member found that it was common ground between the parties that there was an agreement between them that the residential tenancy agreement be terminated on 31 January 2017 with possession to be delivered on that date. It was also found that it was common ground that the agreement was on terms that no rent would be payable from 3 November 2016 to 31 January 2017;
2. The Principal Member recorded that the tenants asserted that in respect of the above agreement it was agreed that the Tribunal would deal with the parties' applications at the hearing on 2 November 2016. This was interpreted by the Principal Member to mean that the parties agreed that the Tribunal would hear the contested applications for rent reduction or compensation on 2 November 2016. Indeed that occurred;
3. The Principal Member decided that it was appropriate to make orders granting the tenants leave to appeal out of time in respect of amended orders 6 and 13 made 21 November 2016 (they being the order for the tenancy to be terminated and the order setting aside the order providing for a rent free period) and to make the termination order conditional on no rent being payable by the tenants for the period from 3 November 2016 until 31 January 2017;
4. The Principal Member made it clear that what remained to be dealt with by an Appeal Panel was the question of whether leave to appeal out of time should be granted in respect of the orders for compensation and the work order (orders 7 to 12 of the orders of 21 November 2016);
5. The Principal Member then made the following orders:
1. Grant leave to appeal out of time in respect of orders 1 and 8 made 2 November 2016 as varied by orders 6 and 13 made 21 November 2016 and allow that part of the appeal.
2. Orders 1 and 8 made on 2 November 2016, as varied by orders 6 and 13 made on 21 November 2016, are set aside.
3. In lieu thereof the following orders are made in application RT 16/26015:
(1) By consent, the Residential Tenancy Agreement is terminated on 31 January 2017 and possession is to be given to the landlord on the date of termination. The tenants may terminate the residential tenancy agreement earlier than 31 January 2017 by giving 48 hours written notice to the landlords' agent.
(2) It is a condition of order (a) that no rent is payable by the tenants to the landlords for the period 3 November 2016 to 31 January 2017.
4. The appeal in respect of application RT 16/31600 is dismissed.
5. The stay order 1 (suspending the order for possession) made 24 February 2017 is set aside.
6. Save as provided above, the issues of extending time to appeal or otherwise granting leave to appeal in respect of the grounds of appeal other than the claims resolved by these orders, are to be dealt with at the hearing of the appeal on 4 April 2017.
Accordingly, this appeal decision deals with the compensation orders (including the work order) made on 21 November 2016. Notwithstanding this conclusion, the tenants sought to re-agitate the making of the termination order and we will refer to this aspect subsequently in this decision.
[2]
Parties and Representation
At the appeal hearing the tenants were represented by Mr Bridgford who stated he had authority to represent the other tenants. The landlords were represented by their managing agent, Mr Hass. We were informed by both representatives that the Appeal Panel decision of 10 March 2017 may contain an inaccuracy regarding the identity of the parties. The correct position is that the appellants are Kevin Bridgford, Victoria Bladen, Helen Seamark and Allan Bladen. The respondents are Greg Brien and Kay Brien. We note that on 24 February 2017 the Tribunal ordered that Helen Seamark and Allan Bladen be joined as respondents to the appeal. In view of what we were told at the appeal hearing, we will vary that order so as to make them (Helen Seamark and Allan Bladen) co-appellants rather than respondents.
[3]
The Notice of Appeal
The Notice of Appeal addresses objections to the alterations made to the orders concerning the termination of the tenancy and the rent free period. These have been resolved in the Appeal Panel decision of 10 March 2017. The balance of the Notice of Appeal concerns an objection to the amended orders made on 21 November 2016 and 29 December 2016. The Notice of Appeal states that the tenants were not given an opportunity to make submissions with respect to those amendments and that they have therefore suffered a denial of procedural fairness.
The Notice of Appeal also includes submissions as to what the tenants did after they received the decision of 21 November 2016. It is not clear when the tenants sought a statement of reasons but, as indicated earlier, a statement of reasons was published on 29 December 2016. They then sought legal advice which appears to have been obtained in early February 2017.
[4]
Reply to Appeal
The landlords Reply objects to the appeal being filed out of time. In other respects the Reply makes submissions concerning the factual matters which gave rise to the dispute between the parties and the orders made in November 2016. The Reply also disputes many of the accusations made by the tenants. The landlords have not filed any cross appeal.
[5]
The Tenants' Written and Oral Submissions
At the appeal hearing Mr Bridgford submitted that the orders made on 2 November 2016 were the consequence of a package of orders which the parties had agreed upon and that, given the landlords breach of those orders (by not paying the monies ordered to be paid) the Appeal Panel ought to set aside the orders of 2 November 2016 and order a rehearing. Mr Bridgford took us to a portion of the transcript of the hearing on 2 November 2016 which he said supported his contention that the Member had been asked to make all of the orders pursuant to an agreement reached between the parties.
For reasons which we will explain subsequently, we informed Mr Bridgford that our view was that the Appeal Panel decision of 10 March 2017 had made final orders in respect of termination of the tenancy and for the rent free period and that the only matters which we would be able to consider was the appeal in respect of the compensation orders. We informed the parties that our view was that we had no power to in effect hear and conduct a further appeal from the decision of the Principal Member made on 10 March 2017.
Mr Bridgford submitted that the applications which the tenants had brought were for a reduction in rent for a twelve month period (recognising that the RT Act limits orders for the reduction of rent to a period of twelve months - s 44(6)) as well as a claim for further compensation for breaches by the landlords in the period after the twelve month reduced rent period had expired. Mr Bridgford took us to documents contained in the file of the Tribunal in connection with the tenants' applications in which it was clear that the tenants were seeking orders pursuant to s 44(1)(b) of the RT Act as well as claims for compensation under s 187(1)(d) of the RT Act. Mr Bridgford also stated, as indicated earlier in these reasons that his understanding was that all orders should have been stated to have been made by consent. He submitted that he understood that it was a feature of the agreement between the parties that if the orders for the payment of money within seven days (i.e. by 9 November 2016) were not complied with, then the orders (including the termination order) were to have no continuing effect.
[6]
Landlords Submissions
Mr Hass made submissions on behalf of the landlords. The landlords' position is that the appeal should be dismissed. The landlords accept that the Appeal Panel decision of 10 March 2017 has resolved aspects of the appeal, namely the tenancy termination and the rent free period.
Mr Hass also submitted that the orders made on 2 November 2016 were not made by consent (except for order 1 and order 8 dealing with termination and the rent free period). The orders for compensation were made following a contested hearing. Mr Hass also informed us that he had not been able to put forward any evidence or sufficient evidence at the hearing because of difficulties in collecting such evidence from the previous agent and/or the landlords.
Mr Hass sought to introduce some fresh evidence concerning the dispute and, in particular, drew out attention to our report from a Mr McReynolds which Mr Hass said supported the view that the damage to the septic system had not been caused by a breach by the landlords but rather by the livestock owned by the tenants. For reasons which we will explain subsequently, we do not propose to allow the fresh evidence which Mr Hass had sought to have adduced to be considered.
[7]
Submissions in Reply
Mr Bridgford was given an opportunity to make submissions in reply but is not necessary for us to summarise those submissions.
[8]
Extension of Time
We are of the opinion that leave should be granted to the tenants to file this appeal out of time. Our reasons follow.
Rule 25 of the Civil and Administrative Tribunal Rules 2014 (the Rules) provides for time limits for the filing of appeals. Rule 25(4)(b) provides that in the case of an internal appeal against a decision made in residential proceedings, the appeal must be filed within fourteen days from the day in which the appellant was notified of the decision or given reasons for the decision (whichever is the later). This is an internal appeal from a decision made in residential proceedings. The reasons for decision were published on 29 December 2016. The Notice of Appeal does not indicate when those reasons were received but does indicate that the tenants sought to obtain legal advice in January 2017 which they obtained some weeks later. Accordingly, the relevant time for filing the appeal is sometime in January 2017 and the tenants appear to have been out of time by approximately two to three weeks. Given the holiday period (being a time during which it may be difficult to obtain legal advice) the complexity of these proceedings arising by reasons of the publication of three sets of decisions, it was not unreasonable in our view for the tenants to have taken some time beyond fourteen days to file the Notice of Appeal. Furthermore, in respect of those parts of the appeal which have been resolved by the Appeal Panel decision of 10 March 2017, time has been extended resulting in a decision in the landlords favour. An additional reason to extend time is that it would be just to do so given the extension already granted resulting in a decision in the landlords favour (namely confirmation of the termination of the tenancy).
A further reason is that in our view (for reasons explained in detail below) it is apparent that an injustice has occurred and, accordingly, it would be in the interest of justice for the issues raised by the tenants to be reviewed by this Appeal Panel.
[9]
The Package Point
Earlier in these reasons we referred to the submission put forward on behalf of the tenants that the orders made on 2 November 2016 were a package of orders agreed to between the parties and that those orders should not prevail given the landlords' breach of their obligation to pay the amounts ordered to be paid to the tenants. The problem with this contention is that there is no evidence to support it. It is contrary to the submissions put forward by Mr Hass on behalf of the landlords and there is nothing to support it in the pages of the transcript (which the tenants have included in their submissions) which we were asked to review. In our view, based upon our reading of the transcript, the orders accurately reflect that the parties consented to the tenancy being terminated and consented to a rent free period. These two matters were confirmed in the Appeal Panel decision of 10 March 2017 (par 33). The other orders were made following hearing the evidence and were not made by consent.
Accordingly, the only issue remaining in this appeal is whether the substance of orders 7 to 12 made on 21 November 2016 (and the same orders of 29 December 2016) should remain (as is the contention of the landlords) or whether those orders should be set aside and the orders of the 2 November 2016 reinstated.
[10]
The Procedural Fairness Argument
The Tribunal purported to make the orders of 21 November 2016 pursuant to powers granted by s 63 of the NCAT Act. That section, in summary provides, that the President or the Member who presided at the proceedings may alter the text of a decision if satisfied that there "is an obvious error in the text of a notice of decision or a written statement of reasons for the decision".
Section 63 (and similar provisions concerning the rules applicable to Courts) are often referred to as the "slip rule". In an Appeal Panel decision reported as Yang v Oppidan Homes Pty Ltd [2016] NSWCATAP 146, the Appeal Panel recorded that Courts have set out a number of principles relevant to the operation of the slip rule. One such principle has been stated to be that in order for the slip rule to apply, the Court (or Tribunal) must be satisfied that had the matter been drawn to its attention, it would have made the correction at once. A further principle is that the slip rule is not applicable where it involves the exercise of an independent discretion not exercised at the time in question.
Here, in our view, the amendments made on 21 November 2016 went far beyond any power available under s 63 of the NCAT Act. The amended orders reduced the amounts of compensation. The reason for the reduction is not clear but one can infer that the Member thought it necessary to reduce the rent reduction period to twelve months (and consequentially the amounts of money stated in the orders) having regard to s 44(6) of the RT Act. However, the amended order also removed any reference to the rent free period and this obviously constituted a further significant alteration in the rights and obligations of the parties.
In our view, the use of s 63 of the NCAT Act in the way it was exercised constituted an error of law and the orders of 21 November 2016 must therefore be set aside. It follows that to the extent that those orders are repeated on 29 December 2016 they are also required to be set aside.
Given this conclusion, it is not necessary to expressly deal with the procedural fairness point raised by the tenants. It is obvious that to the extent that orders were changed without the opportunity to make any further submissions, there was a denial of procedural fairness.
[11]
Efficacy of the Orders 2 November 2016
It is necessary to express a view as to whether the orders made on 2 November 2016 were capable of being made having regard to the limitations contained in s 44(6) of the RT Act. If those orders were not capable of being made, then it would also be necessary to set aside those orders and remit the proceedings back to the Consumer and Commercial Division for a rehearing.
Where a tenant brings an application under the RT Act under s 44(3), the Tribunal may make an order under s 44(1)(b). That section provides that the Tribunal may on application of a tenant make an order that rent payable under an existing or proposed residential tenancy agreement is excessive having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises and that, from a specified day, the rent of the residential premises must not exceed a specified amount. Section 44(6) provides that an order by the Tribunal specifying a maximum amount of rent has effect for the period (of not more than twelve months) specified by the Tribunal. Section 44(3) requires the tenants' application to be made before the end of the tenancy.
Section 190 of the RT Act provides that a landlord or tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations. Section 187 provides that the Tribunal may upon application by a landlord or tenant (or other persons) make one or more of the orders set out. They include an order for the payment of an amount of money (s 187(1)(c)) or for an amount as to compensation (s 187(1)(d)).
In our view, provided the various elements of the legislation are complied with (for example that the application is brought within time as required under s 190 of RT Act) it is possible for a tenant to seek orders both for reduction of rent and for compensation. The period referable to the reduction of rent must not breach s 44(6) and the period for which rent is reduced should not overlap with a period in respect of which compensation has been awarded. Paragraph 40 of the Appeal Panel decision of 10 March 2017 made comments concerning such claims and we agree with those comments.
The tenants' documents filed in connection with application RT 16/22190 seeks orders under both s 44(1) and a compensation order under s 187(1)(d) of the RT Act. If the Tribunal made an order to reduce the rent for a period of twelve months but there was a basis for awarding compensation for a period beyond the twelve months, then it would be appropriate to do so subject to the necessary time limits being complied with. In this case the landlords have not submitted that s 190 has not been complied with.
[12]
Landlords' Fresh Evidence
As stated earlier, Mr Hass sought to adduce fresh evidence and in our view, that evidence (being the report of Mr McReynolds dated 20 February 2017) was evidence that could reasonably have been put forward at the hearing in November 2016. It concerned an inspection conducted in 2015. In our view, the explanation for not putting forward this evidence in November 2016 was not persuasive and to allow it now would be inconsistent with the principles of finality. This means that evidence should be put forward at the hearing and to allow fresh evidence after the hearing (other than evidence not reasonably available at the time of the hearing) would mean cases run the risk of not being finalised.
[13]
Late Submissions
At the hearing, Mr Hass drew our attention to submissions he had filed the day before and which had not been provided to us. He made oral submissions concerning the written submissions. We have since considered the written submissions. They do not change our views recorded earlier in these reasons. We add that the submissions seek to alter some of the orders made on 2 November 2016 (even though no appeal has been filed by the landlords) and also seek fresh orders in relation to matters arising after 2 November 2016. They are not matters which can be raised on this appeal. Some of the orders being sought may be the subject of fresh applications.
Accordingly, in substance the orders of 2 November 2016 must be reinstated, subject to amending the date for payment and restating the rent reduction period. Order 7 of 2 November 2016 requires work to be done and we extend the time for compliance with the order to 30 May 2017. We also give leave to the landlords to make an application to be relieved of the obligation to comply with that order in the event that the tenants vacate the premises and the landlords do not wish to do the work required by the order.
We note that s 187(4) of the RT Act imposes monetary limits on Tribunal orders. The parties did not raise the question of whether the total of the amounts in the proposed orders (which exceeds $15,000.00) complies with s 187(4). There is a reasonable basis for concluding that s 187(4) is intended to address orders individually, not collectively. We are content to reinstate orders 2 to 7 of 2 November 2016.
[14]
Conclusion
It follows that the following orders must be made:
[15]
Orders
1. The order made on 24 February 2017 joining Helen Seamark and Allan Bladen as respondents to the appeal is varied and Helen Seamark and Allan Bladen are joined as co-appellants;
2. The time for filing the appeal is extended to 13 February 2017;
3. The appeal is upheld;
4. The orders made on 21 November 2016 and 29 December 2016 are set aside;
5. In the place of the orders set aside the orders which follow are made:
1. Pursuant to s 187(1)(d) of the Residential Tenancies Act the landlords, Greg Brien and Kay Brien shall within 7 days pay to the tenants, Kevin Bridgford, Victoria Bladen, Helen Seamark and Allan Bladen the sum of $3,400.00 being a reduction of rent pursuant to s 44(1)(b) of the RT Act for failure by the landlords to replace the shed/stables from 13 July 2015 to 2 November 2016;
2. Pursuant to s 187(1)(d) of the Residential Tenancies Act the landlords, Greg Brien and Kay Brien shall within 7 days pay to the tenants, Kevin Bridgford, Victoria Bladen, Helen Seamark and Allan Bladen the sum of $8,800.00 being a reduction of rent pursuant to s 44(1)(b) of the RT Act for failure by the landlord to repair the sewerage and drainage system from 24 February 2015 to 2 November 2016;
3. Pursuant to s 187(1)(d) of the Residential Tenancies Act the landlords, Greg Brien and Kay Brien shall within 7 days pay to the tenants, Kevin Bridgford, Victoria Bladen, Helen Seamark and Allan Bladen the sum of $1,000.00 compensation for breach of clause 23 of the residential tenancy agreement - unauthorised and frequent access by landlord to premises;
4. Pursuant to s 187(1)(d) of the Residential Tenancies Act the landlords, Greg Brien and Kay Brien shall within 7 days pay to the tenants, Kevin Bridgford, Victoria Bladen, Helen Seamark and Allan Bladen the sum of $2,000.00 compensation for breach of clause 18.3 of the residential tenancy agreement - failure to keep the premises in a reasonable state of repair;
5. Pursuant to s 187(1)(d) of the Residential Tenancies Act the landlords, Greg Brien and Kay Brien shall within 7 days pay to the tenants, Kevin Bridgford, Victoria Bladen, Helen Seamark and Allan Bladen the sum of $2,000.00 compensation for breach of clause 1 of the residential tenancy agreement and for breach of s 49(2) of the Act failure to provide vacant possession to tenants;
6. Default in the payment of any Instalment will cause the whole of the balance then outstanding to become immediately due and payable; and
7. The Tribunal orders that the landlords, Greg Brien and Kay Brien are to cause the undertaking of the following work in a proper and workmanlike manner on or before 30 May 2017.
Details of Work order:
repair of the drainage, sewerage ad plumbing system in accordance with the report dated 17/8/16 of SIR Plumbing, Gasfitting and Excavations as follows:
a) the hot water services are to be repaired or replaced as necessary to ensure that each has a Duo valve and tempering valve present and operative.
b) to repair or replace as necessary the drainage systems from all dwelling to the septic tank to ensure correct placement of the main house vent so that the water seal in each toilet operate to ensure the proper water flow and to prevent the influx of methane gas into the dwelling.
1. The respondents are given leave to apply to be relieved of the obligation to comply with order (vii).
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: 19 May 2017
Parties
Applicant/Plaintiff:
Bridgford
Respondent/Defendant:
Brien
Cases Cited (2)
(6) The respondents are given leave to apply to be relieved of the obligation to comply with order (vii).
Catchwords: Slip Rule - Section 63, procedural fairness, rent reduction, application and claim for compensation
Legislation Cited: Civil and Administrative Tribunal Act 2013
Civil and Administrative Tribunal Rules 2014
Residential Tenancies Act 2010
Cases Cited: Bridgford & Anor v Brien & Ors [2017] NSWCATAP 54
Yang v Oppidan Homes Pty Ltd [2016] NSWCATAP 146
Texts Cited: Nil
Category: Principal judgment
Parties: Kevin Bridgford (First Appellant)
Victoria Bladen (Second Appellant)
Helen Seamark (Third Appellant)
Allan Bladen (Fourth Appellant)