Brown v Shubbian

NCAT Appeal Panel|2024-11-07

Background

This appeal concerns a residential tenancy agreement regulated by the provisions of the Residential Tenancies Act 2010 (NSW) (the RT Act). The Appellant is the tenant under the agreement and the Respondents are the landlords.
By an application lodged with the Tribunal on 15 February 2024 the Appellant sought a number of orders but the only orders which remain relevant for the purposes of this appeal were orders concerning s 44(1)(b) of the RT Act to the effect that the rent payable is excessive due to the reduction or withdrawal of goods, services or facilities.
The Appellant's application was heard on 21 June 2024 and on the same day, the Tribunal published its orders and provided a written statement of reasons. We will refer to the decision under appeal as the Decision.
For the purposes of understanding the appeal it is necessary to summarise the Decision as follows: 1. Order 3: pursuant to s 44(1)(b) of the RT Act the Tribunal found that the rent payable pursuant to the residential tenancy agreement dated 7 June 2023 is excessive having regard to the reduction in goods or services at the premises arising from the landlord's failure to repair. 2. Order 4: from 7 June 2023 to 4 February 2024 the rent must not exceed $125 per week for 34.28 weeks. At the current rent of $250 per week the tenant is awarded a rent reduction of $4,285.71 for the period of the agreement to 4 February 2024.We were informed at the hearing that the correct rent was in fact $230 per week. 3. Order 5: the sum of $4,285.71 is reduced by 33% due to the tenant's failure to mitigate his damages by commencing proceedings in the Tribunal "during the above term". The "claim period" between 4 February 2024 and the end of the 12 month maximum period in s 44(6) is dismissed due to the tenant's failure to mitigate his damages "in light of the landlords offer of alternative accommodation on that date, and this being after the end of the term of the lease, meaning that there would not have been any early vacating expenses if the tenant did move ". 4. Order 6: the net sum of $2,871.43 is to be credited to the tenant's rental account with the landlords' agent and may be offset against any rent arrears. 5. Order 7: the application for compensation under s 187(1)(d) is dismissed. 6. Order 1 was a consent order adding the second respondent to the proceedings. Order 2 was an order dismissing the Applicants application for an order that the Respondents carry out repairs. That order is not the subject of appeal. 7. The Tribunal found that it was not in dispute that the Appellant had occupied the tenanted premises for several years and that the parties had entered into the current tenancy agreement on 7 June 2023 for a term expiring 12 December 2023 at a rent of $230 per week. The tenancy was continuing as a periodic tenancy at the date of the hearing. Routine inspections had been conducted by the landlords' agent from 2017 and the last "tendered agent's periodic report" was dated 15 August 2023. On 2 February 2024 the Appellant's advocate lodged a request for repairs in writing to the agent. 8. From [19] the Tribunal referred to the "expert evidence" of Mr Edwards, a licensed carpenter, who provided a report as to the state of the tenanted premises. 9. At [24] the Tribunal found that the Appellant had never reported any need for repairs to the landlord until February 2024. At [25] the Tribunal found, based upon the evidence of Mr Edwards, that the premises were in "such poor condition as to require "gutting" if any repairs were to be done". The Tribunal found that the agents had inspected the premises on 15 August 2024 (sic) some eight months earlier and found many of the "same needs for repair". The Tribunal found that the Respondents were aware of the need for substantial repair even if the full scope of items per Mr Edwards' report was not known. The Tribunal found that the scope of repairs means that the premises "would be uninhabitable during a lengthy repair works period if cost-effective". 10. At [27] the Tribunal found that the premises are uninhabitable and the Tribunal gave reasons for refusing to make an order that the Respondents undertake repair work. 11. From [30] the Tribunal considered the Appellant's obligations to mitigate loss and referred to the fact that clause 40 of the residential tenancy agreement provides that the law relating to mitigation applies to a breach of the residential tenancy agreement. The Tribunal found that the tenant had failed to mitigate his loss "by delaying bringing proceedings for over seven months". The Tribunal adopted the Appellants 50% "reduction calculation from commencement of the tenancy which I consider to be fair and reasonable but then reduce this rent reduction damages by 33% for failure to mitigate". The Tribunal then stated: "From 4 February 2024 I disallow any reduction as from that date. I am satisfied the landlords' agent was offering the tenant viable and rent-compatible alternative accommodation. The tenant did not inspect or accept any of these alternatives as described below". 12. From [31] the Tribunal stated that from 4 February 2024 the Respondents' agent acknowledged that the premises were uninhabitable and that the agent offered three alternative rentals for inspection by the Appellant and, if approved, a tenancy at "as near as possible" current rent. The Tribunal found that the Appellant did not inspect or accept such offers. The Tribunal found that was a failure by the Appellant to mitigate by the failure "to accept offered alternative habitable premises from 4 February 2024. No reduction should be awarded from that date".

Notice of Appeal

By Notice of Appeal lodged on 4 July 2024 the Appellant appealed the Decision and later modified the scope of the appeal. The Appellant's representative confirmed at the hearing of the appeal that the appeal is limited to the Tribunal's decision to reduce by 33% the amount of the reduced rent between 7 June 2023 and 4 February 2024, and further the appeal is concerned with overturning the Tribunal's order that the claim for reduction in rent from 4 February 2024 to 7 June 2024 (being the expiration of the 12 month maximum period regulated by s 44(6) of the RT Act) be dismissed due to the Appellant's failure to mitigate. In substance, the Appellant appeals against orders 4, 5 and 6. There is no appeal from order 2 dismissing the application for an order that repair work be undertaken and nor is there an appeal from order 7 (by which the Appellant's claim for compensation was dismissed).
As the appeal concerns the operation and construction of s 44 of the RT Act, it is helpful to set out its full terms below: 44 Tenant's remedies for excessive rent (1) Excessive rent orders The Tribunal may, on the application of a tenant, make any of the following orders-- (a) an order that a rent increase under an existing or proposed residential tenancy agreement is excessive and that, from a specified day, the rent for residential premises must not exceed a specified amount, (b) 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 for residential premises must not exceed a specified amount. (2) Time limit for excessive rent increase applications An application for an order that a rent increase is excessive must be made within the period prescribed by the regulations after notice of the increase is given. (3) Applications on withdrawal of goods or services A tenant may, before the end of a tenancy, make an application that the rent is excessive, having regard to the reduction or withdrawal of any goods, services or facilities provided with the residential premises, even if those goods, services or facilities were provided under a separate or a previous contract, agreement or arrangement. (4) Determination of excessive rent For the purposes of making an order under this section, the Tribunal may declare that amounts payable under a contract, agreement or arrangement under which goods, services or facilities are provided to the tenant are rent. (5) The Tribunal may have regard to the following in determining whether a rent increase or rent is excessive-- (a) the general market level of rents for comparable premises in the locality or a similar locality, (b) the landlord's outgoings under the residential tenancy agreement or proposed agreement, (c) any fittings, appliances or other goods, services or facilities provided with the residential premises, (d) the state of repair of the residential premises, (e) the accommodation and amenities provided in the residential premises, (f) any work done to the residential premises by or on behalf of the tenant, (g) when the last increase occurred, (h) any other matter it considers relevant (other than the income of the tenant or the tenant's ability to afford the rent increase or rent). (6) Effect of excessive rent order An order by the Tribunal specifying a maximum amount of rent-- (a) has effect for the period (of not more than 12 months) specified by the Tribunal, and (b) binds only the landlord and tenant under the residential tenancy agreement or proposed residential tenancy agreement under which the rent is payable.
The Appellant lodged written submissions in support of the appeal and the grounds of the appeal are identified in those submissions.

Reply to Appeal

The Respondents have lodged a Reply to Appeal in which they state in summary that they support the Tribunal's orders.

Appellant's Submissions and Grounds of Appeal

Ground 1 is to the effect that the Tribunal erred in imposing upon the Appellant the obligation to mitigate in respect of a rent reduction claim. The Appellant submitted that "mitigation is an inapplicable legal principle with respect to rent reduction claims pursuant to s 44(1)(b) of the RT Act". Accordingly, the Appellant sought to have the terms of the order altered so that the Appellant obtained a 50% reduction in rent for the full 12-month period as claimed.
The Appellant submitted that a claim under s 44 for a rent reduction because of the withdrawal of goods or services is not a claim for damages for breach of contract by the landlord. It is a remedy to ensure that tenants are not made to pay for something that they are not receiving. The Appellant submitted that a claim for rent reduction arising by reason of withdrawal of goods or services can arise through no fault of or breach by the landlord. The Appellant submitted that the "defence of failure to mitigate losses cannot be raised against a rent reduction claim because a breach of contract is not an element that a tenant need prove to succeed in such a claim". The Appellant described a rent reduction order as "simply a temporary modification of one term of the contract (ie. the rent payable) as a result of the modification of another term of the contract (ie. services/facilities not provided).
The Appellant relied upon an extract from the Appeal Panel decision of Halil v NSW Land and Housing Corporation [2023] NSWCATAP 72. That case concerned a rent reduction claim and an allegation that the landlord faced difficulties in addressing the state of the tenanted premises by reason of the tenant denying access to the tenanted premises. At [137] the Appeal Panel stated that they were "not sure whether the so-called duty to mitigate applies to claims made under s 44(1)(b) because such a claim is not a claim for damages. The Appeal Panel referred to an extract from Halsbury's Law of Australia in which the authors refer to a failure to mitigate arising in circumstances of a tort or breach of contract which causes damage.
We pause to comment that in that case, the Appeal Panel recorded that the landlord had not failed to act with reasonable diligence and that the landlord had not reduced or withdrawn goods or services. Rather the Appeal Panel recorded that the evidence disclosed that the cause of the reduction or withdrawal of goods, services or facilities was caused by the tenant herself in refusing to provide access to the landlord.
By ground 2, the Appellant submits that, if the Appeal Panel finds that a landlord can raise the defence of failure to mitigate losses in response to a rent reduction claim, the Appellant, nevertheless, contends that the orders relating to mitigation of loss should be overturned because the defence should have been raised prior to the hearing. The Appellant relied upon an extract from the text by Radan et al in Principles of Australian Contract Law 4th ed at page 761 which stated that mitigation should be raised by a defendant at the time of filing a defence. If this is not done the court proceeds upon the assumption that the plaintiff has undertaken reasonable steps to avoid loss and the issue of mitigation cannot be raised at the hearing of the case.
The Appellant submitted that in the proceedings at first instance, the Respondents did not raise the defence of failure to mitigate in their filings and submissions prior to the hearing. The defence of failure to mitigate was raised by the Tribunal member who mentioned this issue at the start of the hearing and then directed the parties to address this issue in closing submissions after each party had presented their case. The Appellant submitted that he had no opportunity to sufficiently respond to the issue of mitigation.
The Appellant submitted that, in the absence of the Respondent raising the defence of mitigation prior to the hearing, the Tribunal should have proceeded on the assumption that the Appellant had taken reasonable steps to avoid loss.
The Appellant submitted that the consequence was that he was denied procedural fairness in having an opportunity to consider and respond to such a defence.
By ground 3, the Appellant submits that even if the Appeal Panel finds that a failure to mitigate loss can be applied to a rent reduction claim and that it was appropriate for the Tribunal to raise this issue despite neither party raising or sufficiently addressing the issue, the Appellant, nonetheless asserts that in the circumstances of this case, such a defence cannot succeed. The Appellant submitted that the principle of mitigation of loss does not arise out of any actual duty or obligation of an aggrieved party to the wrongdoer. It exists only in the event that a failure to mitigate the loss arises to the level that the wronged party can be considered a concurrent wrongdoer. In Thai Airways International Public Company Ltd v KI Holdings Co Ltd [2015] EWHC 1250, Leggett J said at [33] that the essential purpose of the mitigation rules is to identify which costs and benefits accruing to the claimant are to be treated as consequence of the defendant's wrong and which are to be treated as caused by the claimant's own action or inaction.
The Appellant submitted that by taking action against the Respondents their relationship as landlord and tenant would have been negatively impacted and that is especially so where the landlord has the "upper hand" in being able to terminate the tenancy without grounds.
The Appellant's inaction in not applying to the Tribunal does not rise to the level of making the Appellant a concurrent wrongdoer.
The Appellant relied upon the Appeal Panel decision in Prior v Al Ali [2020] NSWCATAP 222. That case also concerned an application made under s 44(1)(b) of the RT Act. The Appeal Panel stated that s 44(3) permits a tenant to make an excessive rent application at any time "before the end of the tenancy".
The Appellant's submissions contended that the Tribunal was in error in not awarding a rent reduction at all from 4 February 2024 on the basis that the Appellant failed to mitigate losses by not taking the agent up on the offer to show other available rental properties. The Appellant submitted that it is far from reasonable to expect a tenant to undertake the very costly and time-consuming task of moving house simply to mitigate losses. The Appellant submitted that the choice of staying and seeking repairs rather than leaving the tenanted premises after being there for seven years was a reasonable course of action for the tenant to take. The Appellant's submissions refer to Banco de Portugal v Waterlow [1932] AC 452 at [506]. There the court stated that it is not enough for the wrongdoer to show that it would have been reasonable to take the steps he has proposed: he must show that it was unreasonable for the innocent party not to take them. The court also stated that the wrongdoer must affirmatively show that the other party has acted unreasonably in relation to his duty to mitigate in order for the defence to succeed.
The Appellant submitted that it was unreasonable for the Respondents to expect the Appellant to move simply to mitigate loss and was, nonetheless, a course of action he could not afford to take.
In summary, the Appellant's submission was that the Tribunal erred in applying an inapplicable legal principle to a rent reduction claim and further erred in raising the defence of failure to mitigate on behalf of the Respondents and allowing it to be considered. Despite this denying procedural fairness to the Appellant, the Tribunal further erred in finding that the Appellant's actions rose to the level of him being a concurrent wrongdoer.
Ground 4: this ground contends that the Appellant was denied procedural fairness by the actual or apprehended bias of the Tribunal member. The submissions state that the Appellant does not make this claim lightly but that the evidence "overwhelmingly points to the conclusion that the member prejudged the case and conducted the proceedings in a manner which actively and intentionally pushed towards its predetermined outcomes".
In support of the submission, the Appellant made the following points by reference to an extract from the transcript of the hearing at first instance (copies of which were provided by the Appellant): 1. The Tribunal member "opened the hearing" with a statement to this effect: "So in these types of matters, there is a favourite saying in the Tribunal that the landlord is not the tenant's banker, that really goes back to the issue of time". The Appellant described this statement as indicating that the member had already decided that the tenant had failed to mitigate losses by not applying to the Tribunal sooner. 2. The Respondents did not raise the defence of failure to mitigate. Rather, the member himself raised the issue on behalf of the Respondents "because of his pre-existing opinion that the tenant failed to mitigate losses." 3. The Tribunal determined that the tenant failed to mitigate losses despite this conclusion being "entirely unsupported by the evidence at hand and despite the Respondent not even raising this defence."
The Appellant also contended that the conduct of the member, if not rising to the level of actual bias, constituted apprehended bias. The Appellant submitted that the evidence displays that there was a real possibility that a fair-minded lay observer might reasonably apprehend that the Tribunal member at first instance might not have brought an impartial mind to the resolution of the question the member was required to decide. The Appellant submitted that the factor which caused the member, at first instance, to resolve the question before him otherwise than as a result of a neutral evaluation of the merits, was the underlying position of the member that the Appellant was not deserving of the full claim he sought for reasons that were other than relevant, lawful considerations and issues that arose from the application. In formulating the complaint by this language, the Appellant relied upon the judgment of the Gageler J (has he then was) in Isbester v Knox City Council (2015) 255 CLR 135 at [20].
In support of the contention that the member had predetermined that the Appellant was not deserving of the full claim he sought the Appellant made these points: 1. In stating that the "landlord is not the tenant's banker", the member expressed a view, suggesting that the application was somehow tarnished by a knowing and deliberate use of Tribunal process to realise some pecuniary gain beyond what was deserved. 2. The member made the "admittedly irrelevant and evidently false conclusion" that it was the tenant advocate that acted to put the Respondent on notice of repairs rather than the tenant himself. In fact, the Appellant had provided a statutory declaration that he reported repairs at every inspection over the years and the agent's testimony agreed to that fact. Despite sworn testimony from both sides the member "nonetheless found that the tenant did not report the repairs until a tenant advocate reported them on his behalf". We interpose here to make the comment that this submission appears to be based on a misinterpretation of the Decision. The Decision makes it clear at [23] that the Tribunal made findings that "relate only to the term of this tenancy agreement from 7 June 2023, including the periodic period". The Tribunal then found at [24] that the Appellant "never reported any need for repairs to the landlord until February 2024". The Tribunal stated that the agents inspected the premises on 15 August 2024 and were thus aware of the need for repair. Thus, the finding by the Tribunal that it was the tenant's advocate, rather than the tenant, who reported the need for repairs to the landlord in February 2024 appear to be findings of fact related to the tenancy that commenced in June 2023. 3. The member "unilaterally raised and repeatedly returned (both during the hearing and in his reasons) to an irrelevant consideration for the purposes of a neutral evaluation of the merits of the application" - namely a failure by the Appellant to bring the application to the Tribunal more promptly.
The Appellant also submitted that the member gave no weight to the photographs in the Appellant's evidence bundle on the basis that they did not comply with the procedural directions that all evidence must be sworn. Yet, the member dismissed the entirety of the Appellant's claim for repairs on the basis of a single unsworn statement from a contractor who was not available on the day for cross-examination. The Appellant submits that the member applied different standards to each party's evidence.
Further, the Appellant submitted that the member engaged in "entirely unnecessary nitpicking with the advocate of the distinction between the words 'reduction' and 'withdrawal'" in s 44(1)(b). The Appellant's submissions state that the discussion about "reduction" and "withdrawal" demonstrated unnecessary nitpicking exhibiting a "general disdain for the Appellant's side".

Respondents' Submissions

In response to ground 1 the Respondents submitted that the principle of mitigation applies to the Appellant's claim. The Respondent submitted that the "mitigation principle ensures a fair balance between parties". The Respondents submitted that the principle of mitigation applies to all breaches of contract, including matters of rental reductions due to a reduction in services.
In response to ground 2 the Respondents submitted that their agent did raise as an issue in the proceedings, the Appellant's failure to mitigate his losses. The Respondents further submitted that the member correctly raised the issue of mitigation.
In response to ground 3 the Respondents submitted that the tenant did fail to mitigate. The tenant was under a periodic tenancy and was able to "vacate at any time and as such without any financial strain such as a break of lease fee". The submissions referred to evidence that the Appellant was given assistance in trying to find another more suitable home.
In response to ground 4, the Respondents submitted that the member did not display actual or apprehended bias. The Respondents submitted that the member's reference to landlords not being the tenant's banker was a statement made to emphasise that the landlord is not responsible for subsidising or financing the tenant's choices or desire for change in lifestyle.

Consideration

There is a right of appeal on a question of law and otherwise with the leave of the Appeal Panel: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act). As the appeal is concerned with the RT Act leave may only be granted if the Appellant may have suffered a substantial miscarriage of justice: Sch 4 Cl 12 NCAT Act.
What constitutes a question of law has recently been the subject of extensive explanation in the Appeal Panel decision in Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204. In addition, the earlier Appeal Panel decision in John Prendergast and Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 identified a non-exclusive list of grounds of appeal constituting questions of law. Relevant to this appeal, the Appeal Panel in Prendergast identified the following questions of law: 1. Whether a wrong principle of law had been applied. 2. Whether there was a failure to afford procedural fairness.
Again, relevant to this appeal, the Appeal Panel in Unique listed the following grounds which would constitute a question of law: 1. Whether the construction of a statute or contract arrived at by the Tribunal at first instance was wrong in some identified way: [32(2)]. 2. Whether the Tribunal's decision was vitiated by bias, or a reasonable apprehension of bias, relates to and intersects with the fair hearing rule, and may encompass or be related to the procedural fairness question: [32(3)].
In this case the Appellant submitted that all grounds raised questions of law and the Appellant did not seek leave to appeal to the extent that any ground of may not give rise to a question of law.

Ground 1

Both the residential tenancy agreement between the parties and the standard residential tenancy agreement (being Sch 1 to the Residential Tenancies Regulation 2019) and being the form of agreement prescribed by s 15 of the RT Act contained a clause concerning mitigation of loss. Clause 40 provides: "The rules of law relating to mitigation of loss or damage on breach of a contract apply to a breach of this agreement (for example, if the tenant breaches this agreement, the landlord will not be able to claim damages for loss which could have been avoided by reasonable effort by the landlord)."
In the proceedings at first instance the Appellant alleged that the Respondents had breached their obligations under the tenancy agreement. The Tribunal found that the Respondents had breached the obligation to provide habitable premises (in breach of s 52). The Tribunal further found that the Respondents had breached obligations under s52 of the RT Act to provide and maintain the premises in a reasonable state of repair.
The Tribunal found that because the Respondents had breached their statutory obligations to maintain and repair the premises there had been a reduction or withdrawal of goods, services or facilities by reason of that breach.
The Appellant was, in our view, entitled to compensation for his loss or damage occasioned by the reduction of goods, services or facilities. The RT Act gives an additional statutory remedy in the form of a claim for a reduction in rent pursuant to the provisions of s 44(1)(b). We do not see why, in a case of this kind (where there has been a breach by the landlord of statutory and contractual obligations), the principles of mitigation should not apply. Clause 40 suggests that the principle of mitigation should apply where there is "loss or damage". A reduction of goods, services or facilities, constitutes, in our opinion, a loss to the tenant enabling the tenant, if the tenant so wishes, to make an application under s 44.
The Appellant relied upon the Appeal Panel comments in Halil. In our view, that case can be distinguished on the basis that the landlord in Halil did not reduce or withdraw the goods, services or facilities, but rather that reduction was occasioned by the tenant in denying the landlord access to the premises. Although the Appeal Panel stated in Halil that it was not sure that mitigation could be applied in the case of a claim under s 44 those remarks were not germane to the decision. The decision was based upon the finding that the reduction in goods, services or facilities was occasioned by the tenant's conduct.
In So v Dou [2022] NSWCATAP 179 the Appeal Panel discussed the obligation to mitigate. That case concerned a tenant who had abandoned tenanted premises and the landlord claimed compensation. The Appeal Panel helpfully made reference to two authoritative decisions. The first is that of Ward CJ in Eq (as her Honour then was) in In the matters of Earth Civil Australia Pty Ltd, RCGCBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (all in liq) [2021] NSWSC 966 at [546] where Her Honour said that a "failure to mitigate ensures the defendant is only liable for the portion of the plaintiff's loss caused by the defendant's breach".
The other case is a judgment of the Court of Appeal in Karacominakis v Big Country Developments Pty Ltd and Ors; Big Country Developments Pty Ltd v Chadlace Pty Ltd and Ors; JW Wall Investment Co Pty Ltd and Ors v Big Country Developments Pty Ltd and Ors; Hollingsworth and Anor v Big Country Developments Pty Ltd and Ors [2000] NSWCA 313. At [187] Giles JA (with whom Handley and Stein JJA agreed) said: "A plaintiff who acts unreasonably in failing to mitigate his loss from the defendant's breach of contract will have his damages reduced to the extent to which, had he acted reasonably, his loss would have been less."
The Appeal Panel decision in So v Dou was concerned with s 107 of the RT Act. That section deals with applications by landlords following abandonment of the residential premises by the tenant and the section specifically states that the landlord must take all reasonable steps to mitigate the loss (s 107(2)).
In Bhandari v Laming [2015] NSWCATAP 224, the Appeal Panel was concerned with an application brought by a tenant against a landlord alleging that the landlord had failed to carry out certain repairs to the tenanted premises. The landlord contended that the tenant had acted unreasonably by failing to take steps to find alternative accommodation. The Appeal Panel accepted the principle that a landlord will not be liable for compensation or damages if the tenant has not taken reasonable steps to mitigate loss [56]. The tenant's loss included a claim for a 40% reduced rental. The Appeal Panel found that it was not satisfied that the tenant had failed to take reasonable steps to mitigate her loss. The Appeal Panel appears to have accepted that the claim for compensation (incorporating a claim for reduction in rent) was susceptible to the argument that the tenant had failed to mitigate.
It is our view that there was no error by the Tribunal in considering whether the Appellant had failed to mitigate his loss (in the form of the reduction in the goods, services or facilities in the premises) by his own inaction.
We agree with the Appellant that ground 1 raises a question of law but are of the opinion that the ground has no merit. Ground 1 is dismissed.

Ground 2

Ground 2 also raises a question of law because it contends that the Appellant suffered procedural unfairness by the alleged contention that the issue of mitigation was raised late.
We have been supplied with the submissions of the Appellant lodged with the Tribunal in the first instance proceedings in reply to evidence lodged by the Respondents. The submissions identify the following "defences/excuses" raised by the Respondents: 1. That the tenant was aware of the state of the premises and chose to live there. 2. The tenant did not want the repairs to be completed and was happy with his living conditions. 3. The tenant could have moved.
The above defences were the subject of more detailed submissions.
In the Decision at [22] the Tribunal referred to the submissions on mitigation and stated that neither party made any submission of substance "although the nature of the landlords' evidence serves to raise that principle". Based on the Appellant's submissions in reply we agree that in substance the Respondents' evidence put in issue the question of whether the Appellant's conduct in apparently not making any complaint and accepting the status quo until February 2924 was reasonable. Accordingly, we are of the opinion that mitigation in substance had been raised prior to the hearing and should not have taken the Appellant's representative by surprise.
Additionally, the Tribunal gave the parties an opportunity to make submissions specifically on the question of mitigation. Had the Appellant's representative been of the opinion that they were at a disadvantage and needed more time (either for the purposes of making more considered submissions or for the purpose of adducing fresh evidence) they had an opportunity to make such an application to the Tribunal. They did not do so.
In our view there was no procedural unfairness arising by the manner in which the question of mitigation arose or in the way it was discussed during the course of the hearing. Ground 2 is dismissed.

Ground 3

The basis for the finding in the Decision that the Appellant had failed to mitigate during the period from the commencement of the tenancy until February 2024 was because, in the opinion of the member, the Appellant failed to commence proceedings "during the above term": [5]. Although there is ambiguity as to precisely what the member meant by the reference to "during the above term" the important point to make is that s 44 permits a tenant to make an application under that section "during the tenancy" (s44(3)). In our view that phrase is not limited to the fixed term of the tenancy but extends to the periodic period in which the tenant remains in occupation. The Appellant did not breach any statutory obligation to commence an application within a specific timeframe. Nor is there evidence that the Appellant's apparent delay in commencing proceedings cause the Respondents any prejudice.
In other words, had the Appellant commenced proceedings before or shortly after the commencement of the tenancy in June 2023 as opposed to February 2024 the result would have been the same. Had the Appellant's application been lodged before (when the new tenancy was "proposed") or shortly after the commencement of the tenancy and had the Appellant been successful the rent would have been reduced. The Respondents would have thereafter received the reduced rent. By the Appellant's delay the Respondents have received the higher rent but are now required to repay a proportion or credit the Appellant's ledger with the relevant proportion.
In short, we are of the opinion that the Appellant's delay in commencing the application was not unreasonable and that the Respondents have suffered no additional loss by reason of the Appellant not lodging his application much earlier. In any event the application was lodged within the time allowed by s 44(3).
In our view, the question of law arising under this ground is the fact that the basis for the Tribunal's decision was that the Appellant had an obligation to bring the proceedings earlier than he in fact did. As there was no such obligation, we are of the view that an error of law has occurred and that this ground of appeal should be upheld.
This means that the 33% reduction in the amount awarded by the Tribunal at first instance should be set aside and, in its place, the full 50% reduction should be applicable.
So far, we have only addressed the period up until 4 February 2024 and we will now consider the period after 4 February 2024.
In respect of the period from 4 February 2024 the Tribunal found at [30] that the Respondent's agent "was offering the tenant viable and rent compatible alternative accommodation. The tenant did not inspect or accept any of these alternatives". Then at [31] the Tribunal found that the Respondent's agent offered three alternative rentals for inspection and that the tenant "did not inspect or accept". The Tribunal found that, in those circumstances, the Appellant's conduct constituted a failure to mitigate and that there should be no reduction in the rent from 4 February 2024.
In our view, there was no error in the Tribunal's determination on the basis of the facts as found that the Appellant's conduct constituted a failure to mitigate. We take the Tribunal's conclusion that the Appellant failed to mitigate to mean that it was unreasonable for the Appellant not to inspect or accept the offers of alternative accommodation and that the Appellant's decision to remain in the tenanted premises in circumstances where alternatives were on offer and where the premises had been found to have been uninhabitable meant that there was no basis for there to be a reduction in the amount of the agreed rent.
In our view the Decision does not display an error of law or give rise to a question of law in dismissing the Appellant's claim for a rent reduction from 4 February 2024.
Accordingly ground 3 is upheld in part and dismissed in part.

Ground 4

Ground 4 concerns the Appellant's contention that he was denied procedural fairness by reason of bias by the member or the apprehension of bias. The Appellant relies upon a number of matters which occurred at the hearing. The first concerns the member's statement to the effect that a landlord is not the tenant's banker. We note that the member added the phrase "that really goes back to the issue of time". We interpret the member's remark to be to the effect that in the opinion of the member a tenant should not be allowed to delay in bringing an action for reduction of rent if that delay has the result that a landlord builds up a potential financial obligation to return money to the tenant upon the tenant successfully obtaining an order for reduction of rent.
We are of the opinion that the member's remarks, seen in that light, did not demonstrate bias or a predetermined view adverse to the tenant other than the error (which we have already addressed) that the Appellant should have brought the proceedings earlier.
The Appellant also submitted that there was evidence of bias in the member's statement to the effect that the Appellant had not made a complaint until the complaint lodged in February 2024 via the Appellant's representative. We have already stated that we are of the opinion that the Appellant's submission misinterprets the Decision, which is concerned only with the period commencing from 7 June 2023. We disagree with the Appellant that the member's remarks in this respect, evidenced bias.
A further basis for the contention that the member was biased concerns the differing treatment given to the Appellant's photographs when compared with the Respondents' expert evidence in the form of a report from Mr Edwards. In our view, there are differences that explain the way the Tribunal dealt with this evidence. First, the photographs were in fact objected to by the Respondents' representative. The Appellant states that this only occurred through the encouragement of the member. In our view the language of the member as recorded in the extract from the transcript by which the member explained the basis for a potential objection to the photographs did no more than to help the Respondents understand the basis for a potential objection. On the other hand, the evidence of Mr Edwards that the premises were in such a poor condition as to require to be gutted was, in substance, not challenged by the Appellant's advocate - see [31].
The next basis for the Appellant's contention that the member had a predetermined and biased view of the Appellant's application concerns the assertion that the member engaged in "unnecessary nitpicking". The extract from the transcript reveals that the member sought to obtain from the Appellant's advocate some clarity as to whether the Appellant's contention was that there had been a reduction in goods, services or facilities rather than a withdrawal. The Appellant's advocate did not appear, from the transcript, to appreciate the need to provide particulars and described the member's enquiry as "all semantics". In any event, the advocate said that she was a "happy to go with reduction".
In our view the questioning by the member in order to achieve a better particularisation of whether the assertions were in the nature of reductions or withdrawals was entirely appropriate. To describe the member's enquiries as "unnecessary nitpicking" and exhibiting a "general disdain for the Appellant's side" is unjustified hyperbole.
In our view the contentions of the Appellant that the member engaged in actual bias or that there was sufficient material to say that there was apprehended bias has not been made out. This ground is rejected.

Conclusion

It follows from the reasoning set out in the above paragraphs that order 4 as recorded in the Decision should be modified so that the 50% reduction in rent which the member found to be appropriate should have been calculated on the basis that the rent must not exceed $115 per week (ie. 50% of $230 per week). There was no issue that the member's calculation of 34.28 weeks for the period from 7 June 2023 to 4 February 2024 was in error. That means that the Appellant is entitled to a rent reduction of $3,942.20.
Order 5 should be set aside to the extent that it reduces the amount of the reduction by 33%. Order 6 should be set aside as a consequence of the changes to orders 4 and 5.
The orders of the Appeal Panel are as follows: 1. The appeal is dismissed, except to the extent of the orders that follow. 2. Order 4 is set aside and in its place the Appeal Panel orders that from 7 June 2023 to 4 February 2024 the rent must not exceed $115 per week for 34.28 weeks with the consequence that the rent is reduced by the aggregate amount of $3,942.20. 3. Order 5 is set aside only to the extent that it reduces the sum of the above order by 33%. 4. Order 6 is set aside and in its place, the Appeal Panel orders that the net sum of $3,942.20 is to be credited to the Appellant's rental account to the extent that the Appellant is in arrears but otherwise paid to the Appellant within 14 days of today's date.

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

Amendments 26 November 2024 - The word " the" added before the word "consequence " in order (2), both at end and on the cover page 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: 26 November 2024

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