Brown v Couch; Couch v Brown

NCAT Consumer and Commercial|2021-05-11

REASONS FOR DECISION

In application RT 20/46484 filed 5 November 2020, the tenant, Ms Jennifer Brown, sought an order for the payment of the rental bond. This matter first came before the Tribunal on 7 January 2021. At that time conciliation was attempted between the parties unsuccessfully, and the matter was adjourned for a formal hearing with directions that the landlord, Ms Susan Couch, file any cross application, and the parties file documents in which they wish to rely on the Tribunal and the other party.
In application RT 21/02338 filed 18 January 2021, Ms Couch sought an order for the payment of compensation and the payment of the rental bond from the Ms Brown.
Both matters were listed for hearing before the Tribunal on 5 March 2021. The matters did not proceed on that date as the Tribunal did not have access to documents of the parties, and they were subsequently adjourned for a further hearing. The parties were directed to file further documents and Ms Couch was ordered to particularise the amounts she claimed. Finally the parties were further directed that leave for legal representation would be determined at the substantive hearing.
In her updated documents received, 24 March 2021 Ms Couch sought payment of payment of an amount in excess of $15,000 she agreed at the hearing to accept the jurisdictional limit of the Tribunal.
In accordance with the application of 5 March 2021, Ms Brown was granted leave to be represented and Mr Bauer from Legal Aid NSW appeared. The Tribunal intended to granted leave as requested given the submissions made that Ms Brown suffered from a disability, the quantum and various claims made by Ms Couch, and the assistance that could be provided to the Tribunal in narrowing the issues in dispute given the background of the dispute between the parties and various claims of illegal activities. However the Tribunal was unable to contact her at the hearing on 11 May 2021, at the designated time. Mr Bauer was also unable to contact Ms Brown and advised the Tribunal that his last contact had been on 16 April 2021. In the absence of an appearance by Ms Brown, the Tribunal allowed Mr Bauer to participate in the hearing as a McKenzie friend, and the Tribunal had regard to the documents in the matter submitted by Ms Brown.

ISSUES IN DISPUTE

The issues to be determined in this matter is whether Ms Brown has complied with her obligations as set out in the Act or whether she is responsible for compensating Ms Couch for damages to the property and the landlord's good leased with the premises.
In the particularised claim filed with documents received by the Tribunal on 24 March 2021, Ms Couch claims that Ms Brown is responsible for the payment of the following: 1. $1,990.00, in outstanding rent. 2. $1,830 for the replacement of kitchenware, curtains, sofas, a television, microwave, small appliances, towels and bedding. 3. $38.00 Council roadside rubbish collection fees. 4. $330.00 being the balance of outstanding cleaning costs. 5. $1520.00 being the costs charged by the landlord's agent. 6. $5,310.00 for painting. 7. $2,500 estimated costs of repairs. 8. $2,500 for stress and reputational damage. 9. $1,800 for loss or rent while the premises were being cleaned, re-furnished and painted.
Ms Brown in her written statement claims she complied with her obligations, and denies damage the premises or any furniture of Ms Couch. She claims that Ms Couch's claim is exaggerated and unfair. The submissions filed by Ms Brown allege that Ms Couch has not taken account of fair wear and tear and pre-existing flaws in making her claims.

THE LAW

At the end of a tenancy the tenant must comply with the requirements of section 51(3) of the Act. Briefly, the tenant is to remove their goods, return the keys to the landlord and leave the premises as nearly as possible in the same condition, fair wear and tear excepted and in a reasonable state of cleanliness. Section 51(3) refers to the ingoing condition report as a point of reference. Sections 29 and 30 of the Act deal with the preparation of ingoing and outgoing condition reports.
The matters that may be the subject of a rental bond claim are set out in section 166 of the Act and include the reasonable cost of repairs to, or the restoration of, the residential premises or goods leased with the premises, as a result of damage (other than fair wear and tear) caused by the tenant and the reasonable cost of cleaning any part of the premises not left reasonably clean by the tenant, having regard to the condition of the premises at the commencement of the tenancy.
If a landlord makes a claim on the bond section 165 of the Act provides, in that they must give to the tenant a copy of the completed condition report about the residential premises at the end of the residential tenancy agreement, and copies of any estimates, quotes, invoices or receipts for work for which the rental bond is claimed. Section 165(2) provides that the documents must be provided within 7 days of the claim being brought.
The concept of fair wear and tear was considered by the Tribunal Appeal Panel in the matters of Elhassen v Ayoub [2018] NSWCATAP 34. In this case the Appeal Panel cited Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224, in which the Court of Appeal referred to Haskell v Marlow [1928] 2 KB 45 where the court state that "[R]easonable wear and tear means the reasonable use of the house by the tenant and the ordinary operation of natural forces". The Appeal Panel noted that it follows that both natural forces and the actions of tenants can constitute wear and tear. If a tenant has intentionally or negligently caused damage or the wear and tear is not "fair", the tenant is liable to compensate the landlord for the cost of repairs.
A landlord has the onus of establishing a claim to part or whole of the rental bond. Any such claim will generally be supported by invoices which show the actual damage sustained by the landlord. Further, any such claim must take depreciation into account. A landlord may be compensated for the actual loss suffered but will not receive an additional benefit, that is they are not entitled to a "new for old" assessment of damage. If the Tribunal finds that Ms Brown is responsible for damage then the Tribunal must determine the quantum of damage. In doing so the Tribunal will consider whether Ms Couch has mitigated her damages, whether the damages claimed are proportionate and what depreciation is to be taken into account.

DETERMINATION

The residential premises is one of twenty two townhouses situated within a strata complex at Port Macquarie known as Shelly Beach Resort. Most townhouses within the strata complex are operated as short term holiday rentals. There is also an onsite manager for the strata scheme. Ms Couch had previously had the premises as a short term holiday rental, and it was furnished accordingly. In early 2020 she determined to lease the premises as a long term rental and advertised the property as such.
Overall the Tribunal is satisfied that Ms Couch has established several of the breaches alleged, although it has not agreed in all instances with her assessment of the quantum of her losses. In relation to other matters the Tribunal has declined to make an order of compensation sought as it is not satisfied to the civil standard of proof that the grounds for making the order have been established.

Rental arrears

According to Ms Couch, when Ms Brown vacated the premises on 1 October 2020, rent was paid up until 25 August 2020, with $230 in credit. Ms Couch seeks the sum of $1,990.00 in rent arrears.
Ms Couch claims that she agreed to lease the premises to Ms Brown after several weeks' online communication. At the time, Ms Couch was managing the property herself and lived in Barooga, NSW, over 1,000 kilometres from Port Macquarie. She claims that Ms Brown requested to move in from 1 April 2020, and access was arranged via the onsite manager. Ms Couch has produced a residential tenancy agreement for the premises for the period 1 April 2020 to 30 September 2020 for a rental sum of $420.00 per week. The agreement is unsigned by Ms Brown. Ms Couch claims to have posted it to Ms Brown around 1 April 2020, together with a copy the strata rules, a Fair Trading NSW Tenant Advice brochure and an ingoing condition report.
Ms Couch also claimed that due to the COVID-19 pandemic she was approached by Ms Brown to defer part of the rent. She agreed to defer $70.00 per week, reducing the weekly rental to $350.00 per week, with the deferred rent to be paid in a lump sum on the expiration of the lease term on 30 September 2020. Ms Couch referred to the handwritten note of Ms Brown, produced at page 19 of Ms Brown's documents submitted 21 April 2021, to confirm the rent deferral arrangement. At the time Ms Couch said that Ms Brown claimed to have not received the residential tenancy agreement posted to her and to confirm their arrangement she had requested that Ms Brown send her some written acknowledgement by text.
Ms Couch then claims that she sent a further copy of the tenancy agreement and supporting documents for Ms Brown to complete and arranged for this to be delivered her by the onsite manager. Contained within Ms Couch's documents is a statutory declaration of the onsite manager, Ms Hayward attesting to the request by Ms Couch to delivery of documents around 2 June 2020. Ms Couch has also reproduced text messages in her documents from Ms Hayward confirming the documents were delivered to Ms Brown by being placed under the front door of the premises.
Ms Brown has disputed in her statement receipt of any written residential tenancy agreement or ingoing condition report. She claimed to have entered into an agreement to lease the premises around 14 April 2020, not 1 April 2020 as set out in the agreement produced by Ms Couch. In text messages produced by Ms Couch, Ms Brown also disputes receipt of the documents delivered by Ms Hayward and claims to have been unable to access additional email copies sent by Ms Couch.
The Tribunal is satisfied that Ms Couch sent that agreement to Ms Brown. There is a variety of evidence is that it was sent several times by various methods. The Tribunal places considerable weight on the statutory declaration of Ms Hayward, it is noted that this was declared on 14 September 2020, prior to Ms Brown vacating the premises and at a time she was in considerable disagreement with Ms Couch over how the tenancy was being managed and she is also persistently critical of Ms Couch throughout her declaration. The Tribunal also finds that Ms Brown did not sign or enter into the fixed term tenancy agreement that was submitted.
However a tenancy agreement may be express or implied, oral or in writing or a combination of these elements under section 13 (2) of the Act, and the Tribunal is satisfied that a residential tenancy agreement was entered into by the parties. There is inconsistency in the evidence as to the terms of the agreement from the various evidence of the parties. This arises firstly with the date that the residential tenancy agreement commenced. Ms Couch gave evidence that it was 1 April 2020, and this was the date reflected in the written tenancy agreement. According to Ms Brown's statement, and the signed document that she sent to Ms Couch, it was 14 April 2020. Ms Hayward does not set out the date in her statutory declaration. The ledger provided by Ms Couch records that the first payments of rent and bond were received on 14 April 2020, after negotiations about a rental deferral. Ms Brown was not present at the hearing to refute this evidence and she also did not dispute in her statement that the rent was $420.00 and the subsequent arrangement for the rental deferral. The Tribunal has also considered the email communication passing between the parties towards the end of the tenancy submitted by Ms Brown and notes she does not dispute the deferral arrangement. Overall on the evidence considered, the Tribunal is satisfied that Ms Couch has established that the tenancy commenced on 1 April 2020 and the agreed rental was $420.00 a week. It is also satisfied from the ledger submitted that Ms Couch has demonstrated a claim for rental arrears from 25 August 2020, and with an adjustment of $230.00 credit, will allow the sum of $1990.00 as claimed until the date Ms Brown vacated, 1 October 2020.

Replacement of Goods

Ms Couch claims that annexed to the ingoing condition report that she sent to Ms Brown was a list of goods supplied with the premises. She has also produced photographs and evidence of her previous listing of the premises via Air BnB, and it is accepted that when leased to Ms Brown the premises contained several items of furniture and goods belonging to the landlord. Ms Couch has claimed $54.00 for replacement kitchenware from Kmart as some was damaged, missing, sticky or smelly. A similar reason is provided for the replacement of the sofas, microwave, towels, bedlinen and curtains. Ms Couch has provided receipts for these replacements and based on the age of the items claimed 90% of the costs of the sofas in the sum of $661.00, 50% of the cost for the of the cost curtains, linen and towels in the sum of $565.00, 50% of the cost of replacement of the microwave in the sum of $321.00. It is alleged the television was removed from the premises by Ms Brown and placed in the garage for the duration of the tenancy and when reinstalled was found to be damaged, requiring replacement in the sum of $229.00.
The ingoing condition report relied upon Ms Couch is problematic for the Tribunal. Ms Couch had not attended the premises for some time proximate to Ms Brown taking possession and claims to have relied on information communicated to her about the condition of the premises by the onsite manager. Ms Hayward does not address this is in her statement. In these circumstances the Tribunal has significant reservation about treating it, for the purposes of subsection 30(1) of the Act as a correct statement of the state of repair of the premises on the date set out in the report. The Tribunal therefore gives it less weight than would normally be applicable.
The outgoing condition report also not completed by Ms Couch, as she did not visit the premises after Ms Brown vacated. Instead, she relied upon the onsite manager Ms Hayward, and the chair of the Owners Corporation, Ms Clare Pascoe, to undertake this on her behalf. Ms Pascoe has sworn a statutory declaration to supplement the outgoing report submitted by Ms Couch. Ms Brown was not present at the inspection, and she has not claimed that she sought to be present. It is clear that Ms Hayward and Ms Pascoe did not wish to inspect the premises in her presence. The Tribunal however is satisfied that Ms Pascoe was not a friend of Ms Couch, that she was undertaking the inspection primarily because of other issues that had arisen for the Owners Corporation with Ms Couch's management of the tenancy and her observations are somewhat impartial.
The Tribunal has considered the claim for $54.00 for replacement kitchenware. It is noted that the receipt submitted from Kmart does not document the items that Ms Couch replaced. The photographs submitted by Ms Couch at document 18, comment that 4 kitchen bowls were missing. Ms Couch also referred in submissions to a cutting board. There are no kitchen bowls or cutting boards listed on the document that Ms Couch is relying on as the landlord's inventory of goods. There is also insufficient evidence that further unidentified sticky or smelly kitchenware could not have been washed. The Tribunal is not satisfied that Ms Couch has established the claim for compensation for kitchenware items and the claim for $54.00 is refused.
The Tribunal accepts the evidence presented by Ms Couch that she had purchased the sofas 12 months prior to Ms Brown entering into the premises. The statutory declaration of Ms Pascoe attests to an odour in the premises that had infused the sofa, and that there was a greasy feel to them. The outgoing condition report documents that they were dirty and marked. The Tribunal finds that this was more than fair wear and tear during a 6 month tenancy. The replacement receipt from Fantastic Furniture records costs of $598.00 for a new sofa, an additional $70 was charged for delivery. Although Ms Brown has disputed in her statement that she damaged the sofas, the Tribunal is satisfied on the balance of probabilities that much of the premises was smoke infused and that due to the stains it was necessary to replace the item. However, the Tribunal finds that any costs of delivery should not be awarded. The Tribunal does not accept that Ms Brown as a tenant should bear additional costs because the landlord was situated a considerable distance from the premises and determined to engage the services of others to deliver, unpack and install relevant items. These are further costs in any event that Ms Couch would have normally incurred when the time came for replacement of these items. Therefore the Tribunal will award the sum of $538.20 for the replacement of the sofa.
The Tribunal accepts that the premises were rented with a microwave. Ms Brown acknowledges does not dispute this in her statement. The damage to the microwave is not documented by Ms Pascoe in the outgoing condition report. In her statutory declaration she comments only that it was extremely dirty and with baked on residue under the turntable. The photographs submitted only confirm the residue as reported. On the material before it the Tribunal is not satisfied that the microwave required replacement and declines the compensation as claimed
Ms Couch has claimed 50% of the costs of replacing 10 curtains throughout the premises of varying lengths. There is limited information in the outgoing condition report regarding the curtains other than a note that they are damaged. A commit is also made regarding the dining room curtains that the damage to the rubber backing was existing. Ms Couch has claimed that the reason for replacement is claimed due to smoke contamination. Ms Couch has presented evidence from not only Ms Pascoe, but also the cleaning company she engaged, and the subsequent painters. What is an issue for the Tribunal is that Ms Couch has not established the value of the existing curtains with damaged backing of an unidentified age. Nor does the Tribunal accept that the receipt she has presented from Spotlight represents the replacement costs as Ms Pascoe sets out in her statutory declaration that the ready-made curtains obtained were unsuitable and that other curtains were re-purposed from another unit. It is not clear why Ms Couch was unable to obtain a refund for the unsuitable curtains given she possesses the receipt, and neither has she established why Ms Brown should reimburse her for an incorrect purchase. The Tribunal declines to award compensation for the curtains.
As set out above the Tribunal is satisfied that there was extensive smoke damage throughout the premises. It is accepted from the evidence of Ms Pascoe and the outgoing condition report that some towels and bedlinen was damaged. It is accepted from the statutory declaration of Mr Gow, of Big Red Carpet, that soft furnishings required replacement to eradicate odour and smoke damage. The Tribunal further finds the claim for $200.00 as reasonable for towels, sheets, pillows, bed coverings and mattress protectors for the two bedroom premises.
The Tribunal accepts that the premises were rented with a television. Ms Brown does not dispute this in her statement and or that she removed it from the wall to use her own. Ms Brown claims that she placed it securely in a cupboard and it was undamaged. The evidence of Ms Pascoe is that it was found damaged, with the display being excessively pixelated, and missing a remote at the end of the tenancy in the carport. The Tribunal accepts the evidence of the Ms Couch that the television had to be replaced. According to the receipt submitted this was at a cost of $229.00. Ms Couch has leased the premises furnished since she purchased it several years earlier, around 2016. The Tribunal finds in these circumstances that a 50% depreciation of the costs claims in appropriate and awards the sum of $115.00 for the replacement of the television.

Cleaning and Restoring

The outgoing condition report sets out that the premises was dirty at the conclusion of the tenancy. Ms Pascoe comments specifically that although the toilet, sinks and showers were clean, but that there was dirt in the corners of the rooms, residue under beds, and the general condition of the kitchen was unsatisfactory. Ms Brown does not make any allegations that the premises were dirty when she started her tenancy and sets out that she had arranged a cleaner to do a bond clean on 5 October 2020, but that the cleaner was denied access on or around 7 October 2020. Ms Couch told the Tribunal that she had initially agreed with Ms Brown that her cleaner could come back to clean the premises, but when it had not happened a week after she had vacated alternative arrangements were made, including treatment for the smoke contamination. In any event in subsequent communication with Ms Brown after she vacated, Ms Brown had agreed to pay half the costs of the cleaner Ms Couch engaged and had already transferred to her the sum of $308 on 8 October 2020. The invoice presented by Big Red Cleaning and Pest who undertook the work on 8 October 2020, set out that this involved the cleaning and deodorising of the carpet, mattresses and a smoke odour treatment for the sum of $668.00. The Tribunal is satisfied that the cleaning and deodorising was required and will award the balance of this invoice unpaid by Ms Brown, in the sum of $338.00.
An additional cleaning fee of $760.00 was claimed, based on an invoice submitted by Ms Hayward. Ms Couch engaged the onsite manager to clean her unit and assist with the refurnishing as she prepared to again let it out to the holiday rental market. The invoice dated 30 November 2020, discloses that not only did Ms Hayward clean the unit but she also opened and assembled boxes of furniture delivered, put up curtains and took out rubbish. The Tribunal is again not satisfied that Ms Couch's costs of engaging a third party to assemble and install furniture are costs that reasonably could be expected to be borne by the tenant. It will allow the item of general cleaning, in the sum of $190.00 only. The other miscellaneous tasks are refused.

Painting

As set out above the Tribunal accepts that on the termination of the tenancy that the premises had a significant smoke odour. Further, that Ms Couch did not permit smoking during the tenancy, and the odour left at the premises was more than just fair, wear and tear. In the absence of further expert evidence the Tribunal makes no findings about any other alleged potential contaminants. It is accepted that all walls, including the exposed bricks, required a treatment with a sealant due to smoke damage. Ms Couch has not presented evidence to the Tribunal as to when the premises was last painted. It does not appear to have been during her ownership. Ms Couch has allowed only a 10 depreciation of the costs claimed. In the circumstances the Tribunal does not consider this reasonable as it is noted that she was there was some communication with Ms Brown regarding painting of the exposed brickwork at the premises in exchange for a rent reduction, and she was considering this improvement. The Tribunal considers that reasonably the costs claimed should be depreciated by 50% allowing for depreciation given the age and condition of the existing painting and exposed brickwork. This award of compensation also allows for the fact that the premises could not be re-let for several days while the work was undertaken. It awards the sum of $2,950.00.

Furniture Removal

The Tribunal does not consider it reasonable to award any costs to Ms Couch of disposing of her own furniture. Nor the costs that she incurred arranging for Ms Hayward to place items out for collection because she elected herself not to attend the premises. The claim for $798.00 is rejected.

Repairs

Ms Couch has claimed a cost of $2,500.00 for various repairs including the upstairs robe, kitchen floor, kitchen bench, front door, front door frame and window frame. The Tribunal notes that Ms Hayward has set out in her statutory declaration requests by Ms Couch for strata to arrange repairs to the door and window frames of the premises for damage that was pre-existing when the parties entered into the tenancy. Furthermore, Ms Couch told the Tribunal that some of the items pertaining to the windows and the door were the responsibility of strata to repair. The Tribunal declines to award compensation for these items. The outgoing condition report also does not document any damage to the kitchen bench or kitchen floor. In fact the outgoing condition report claims the bench is undamaged. Ms Pascoe's statutory declaration does not provide additional evidence on this matter. The Tribunal is not satisfied it can place any weight on the photograph submitted by Ms Couch claimed to be of the kitchen bench as it is not consistent the condition report. As to the wardrobe and broom cabinet, Ms Couch sets out in her documents that these items are yet to be fixed due to lack of funds. Her documents and submissions contain not receipts or estimations of the actual costs. She has now re-listed the premises as a holiday rental without undertaking the repairs. The Tribunal is not satisfied overall that the estimate of costs claimed in the sum of $2,500.00 is reasonable or established on the evidence and declines to award compensation for further repairs.

Loss of Rent

Ms Couch has claimed $30.00 per day loss of rent on the basis that the residential premises was uninhabitable until it repairs undertaken and it was refurnished. This is claimed to have been completed on 1 December 2020, a total of 60 days after Ms Brown vacated and the sum of $1,800.00 is sought. The Tribunal does not accept this claim is reasonable or established on the evidence. A lengthy time was taken to engage painters and other contractors as Ms Couch did not attend to this herself, but left it to third parties such as Ms Hayward who had limited incentive to prioritise the works. The painter did not quote for the works until 23 November 2020, over seven weeks after Ms Brown departed. The Tribunal considered that these works could have been undertaken sooner, the lengthy delay was unreasonable. Ms Couch could have re-let the premises again unfurnished as a residential premise, instead she determined to return it to the holiday rental market and spent further time lost further time sourcing appropriate furnishings. The claim for loss of rent is refused. The Tribunal is mindful that there was some downtime in allowing for painting and cleaning, however it has considered these matters in the awards of compensation for those items it has already made.

Stress and Reputational Damage

Ms Couch claims that with Ms Brown's tenancy caused her problems with the onsite manager, and also issues with the strata manager and owners corporation. She maintains that there was massive stress and ongoing damage to her reputation, as well as the stress of the Tribunal proceedings. As set out in the submissions filed on behalf of Ms Brown, there is no provision in the Act for the landlord to have quiet enjoyment of the tenancy, or to be free from interference of their reasonable peace, comfort and privacy. The Tribunal is also bound by the decisions of Insight Vacations Pty Ltd v Young (2010) NSWCA 137 and Flight Centre v Janice Low [2011] NSWSC 132. The effect of these two cases is that because injury to feelings and distress can constitute an impairment of a person's mental health, they amount to personal injury, and are caught by the definition of personal injury in the Civil Liability Act 2011 (NSW). In order for these to be compensable, the 'injury" must be at least 15% of a most extreme case. There is no evidence that Ms Couch has suffered an injury which would put her over the threshold. For this reason, no compensation for non-economic loss is payable, and the Tribunal declines to make an order for this item.

Decision and Orders

For these reasons, the Tribunal makes the following orders which will finalise both proceedings, RT 20/46484 and RT 21/02338: 1. The tenant Ms Jennifer Brown is to pay to the landlord Susan Couch the sum of $6,321.20 on or before 28 June 2021. 2. The Rental Bond Board is to pay to the landlord, Susan Couch, the whole of the rental bond XXX in the sum of $1680.00, plus interest, any amount received is to be credited toward the money order at item (1). 3. The remainder of the claim for compensation by the landlord, is dismissed.

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: 03 September 2021

Civil Liability Act 2011(NSW)

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Judgment (14 paragraphs)

Legislation Cited (3)

Cases Cited (4)