Bulmash v Webster

NCAT Consumer and Commercial|2015-12-16

reasons for decision

These proceedings involve a claim by the Applicant for compensation in respect of a residential tenancy agreement. The Application identifies four elements of the claim. 1. Loss of rent in the amount of $1,650.00 arising from the Applicant's inability to sub-lease the premises for three weeks by reason of mould in the premises. 2. The cost of repainting carried out by the tenant in the amount of $2,000.00, of which $1,123.00 is said to have been out of pocket expenses on materials and labour, and the balance compensation to the Applicant for five days of his own labour. 3. Compensation in respect of a cooktop that did not function for six weeks at the rate of $40.00 per week totalling $240.00; and 4. The sum of $2,860.00 being 10% of one year's rent for "grief and hassle" experienced by the Applicant by reason of the other matters complained of.
Although the application sought orders pursuant to s65(1)(a) of the Residential Tenancies Act 2010 (NSW) ("RTA"), that the landlord carry out repairs, and pursuant to s65(5) of the RTA, that rent be paid to the Tribunal until repairs are carried out, the Applicant did not press for those orders at the hearing.
The Applicant, Mr Bulmash, appeared at the hearing in person. The Respondent was represented by Ms T Tretiak, an employee of the Respondent's managing agents.

Oral evidence

Mr Bulmash gave oral evidence as did Ms Tretiak.
Mr Bulmash gave evidence that he had rented multiple units through the same property managers and that he had sub-let all those units with knowledge of the manager. He stated that he had a good working relationship with the agents.
Mr Bulmash stated his belief that there was a leak in the roof which was causing the mould problems. Mr Bulmash also suggested that the photographs which were contained in Exhibit A showed that the painters employed to repaint the premises in 2012 had painted over the vent. Mr Bulmash specifically referred to the top photo on page 15 of Exhibit A. (I interpolate at this point that I do not accept that the photograph demonstrates that proposition. The photograph clearly shows that most of the vent is completely clear and conveys no more than a suggestion that there may have been some paint on the inside surfaces of a small number of the holes in the vent).
Mr Bulmash gave evidence that he had spoken to Ms Joanne Franks of the Owner's agents several times about the mould and that Ms Franks had said that she had raised the issue with the owner and that he had not responded. Mr Bulmash asserted that the mould became so bad that it became a health issue. Mr Bulmash referred to the email dated 27 August 2014 in which he had complained of the mould. Ms Franks responded on 7 September 2014 and inspected the property in the following week.
Mr Bulmash particularly relied on the email dated 15 October 2015 sent to Ms Franks and the attached photographs. Mr Bulmash said that before sending that email he had spoken to the agent and had asked whether he would be reimbursed if he repainted the unit himself. Mr Bulmash asserted that Ms Franks or another representative of the landlord's agent had said "yes, you will be reimbursed".
Mr Bulmash complained that shortly after he repainted the unit in October 2015 the landlord served him with a termination notice.
In relation to the sub-letting of the premises Mr Bulmash said that one or other of the employees of the managing agent had said to him "we know we gave you the apartment for sub-letting although we can't find the specific letter". Mr Bulmash also suggested that the agents had told him that they didn't want the owner to know they had approved the sub-letting.
Mr Bulmash said that he visited the offices of the agents after completing the painting work and was seeking to obtain reimbursement for his expenses. Ms Tretiak had said to Ms Franks "Did you approve that?" and Ms Franks said "I approved it but only the material costs". Mr Bulmash also gave evidence that Ms Tretiak had asked Mr Bulmash "Do you have it in writing?"
Mr Bulmash said that he attended the office of the agents after sending the email on 15 October 2015 because he wanted to put pressure on the agents to make sure he would get a quick response and to ensure they sent a roofer. When asked why he had not brought proceedings in the Tribunal with respect to what he claimed was the leak from the roof or ceiling, Mr Bulmash said that he had a really good working relationship with the agents and said he felt really bad to take people he worked with to the Tribunal. Mr Bulmash then said that the problem was that he was always changing agents. This is somewhat inconsistent with the proposition that he had a good working relationship with the agents.
Mr Bulmash stated that the premises had become uninhabitable by reason that the premises had become so mouldy that you could not let them. The problem was both the moisture and the smell of damp.
In respect of the stove, Mr Bulmash claimed that there had been a small chip in the cooktop at the commencement of the lease which had continued to grow. That crack had been really small but had recently expanded and the stovetop had ceased to work for two months. It had been repaired the week before the hearing.
Mr Bulmash was unable to point to any documentary evidence that he had paid for his tenant's laundry. He claimed that he had made those payments to the tenants by way of rent reduction. Mr Bulmash did not produce any rent ledger or other document at the hearing to demonstrate that he had allowed his tenants a rent reduction or the extent of any such reduction.
In response to questions from Ms Tretiak, Mr Bulmash acknowledged that the stovetop had been fixed in February 2015 and that there had been no mention at that time either by the tradesman who had repaired the stovetop or by Mr Bulmash that he stovetop was cracked.
When asked about the last line of the email of 15 October 2015 as quoted above, Mr Bulmash stated "I thought that I would get the money back in time through letting the apartment". Mr Bulmash acknowledged that he had taken the chance that he would get a further lease. I note that this answer is entirely inconsistent with Mr Bulmash's evidence that he had received a promise from the agents that he would be reimbursed.
Ms Tretiak also gave oral evidence. She attested to an occasion on 21 October 2015 when Mr Bulmash came into the property manager's office and said words to the effect "I've done the work, I need to be reimbursed". Ms Tretiak understood him to be referring to the painting. Ms Tretiak gave evidence that Ms Franks had said "Why didn't you wait for approval?" and had stated to Ms Tretiak that she did not confirm any approval to Mr Bulmash.
In closing submissions Mr Bulmash stated that the reason for the absence of formal approvals and correspondence is that he had always had informal arrangements. I note that this may be an explanation for the absence of evidence but it does not establish his claim.

Jurisdiction

I find that there was a residential tenancy agreement between the Applicant and the Respondent. Pursuant to s187 of the RTA the Tribunal has jurisdiction on an application by a landlord or a tenant to make orders for the payment of money in respect of an application made under the RTA. Pursuant to s190 of the RTA the landlord or tenant may apply to the Tribunal for an order in relation to a breach of the residential tenancy agreement. The tenant's application is for monetary orders both pursuant to s65(1)(b) of the RTA and in relation to alleged breaches of a residential tenancy agreement. The Tribunal therefore has jurisdiction to determine the claim.

Relevant Provisions

It will be convenient to set out those provisions of the RTA which may be relevant to the Applicant's claim: "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." "45 Remedies for reduction of rent on frustration of residential tenancy agreement (1) The Tribunal may, on application by the landlord or tenant, make an order determining the amount of rent payable if the rent is abated under section 43 (2). (2) The Tribunal may order that: (a) from a specified day, the rent for the residential premises must not exceed a specified amount, and (b) the landlord must repay to the tenant any rent paid by the tenant since the specified day that is in excess of the specified amount." "63 Landlord's general obligation (1) A landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. (2) A landlord's obligation to provide and maintain the residential premises in a reasonable state of repair applies even though the tenant had notice of the state of disrepair before entering into occupation of the residential premises. (3) A landlord is not in breach of the obligation to provide and maintain the residential premises in a reasonable state of repair if the state of disrepair is caused by the tenant's breach of this Part. (4) This section is a term of every residential tenancy agreement." "64 Urgent repairs to residential premises (1) A landlord must, not later than 14 days after being given a written notice from the tenant, reimburse the tenant for the reasonable costs of making urgent repairs to the residential premises. (2) A landlord is required to reimburse the costs only if: (a) the state of disrepair did not result from a breach of the residential tenancy agreement by the tenant, and (b) the tenant gave the landlord or the landlord's agent notice of the state of disrepair or made a reasonable attempt to do so, and (c) the tenant gave the landlord or landlord's agent a reasonable opportunity to make the repairs, if notice was given, and (d) the tenant has made a reasonable attempt to arrange for a licensed or otherwise properly qualified person nominated in the residential tenancy agreement to carry out the repairs, if such a person is so nominated, and (e) the repairs were carried out, if appropriate, by licensed or otherwise properly qualified persons, and (f) as soon as practicable after the repairs were carried out, the tenant gave the landlord or landlord's agent, or made a reasonable attempt to give the landlord or landlord's agent, a written notice setting out details of the repairs and the costs of the repairs, together with the receipts or copies of receipts for costs paid by the tenant. (3) The maximum amount that a tenant is entitled to be reimbursed under this section is $1,000 or such other amount as may be prescribed by the regulations. (4) Nothing in this section prevents a tenant, with the consent of the landlord, from making repairs to the residential premises and being reimbursed for the costs of those repairs. (5) This section is a term of every residential tenancy agreement." "65 Tenants remedies for repairs (1) Orders for which tenant may apply The Tribunal may, on application by a tenant, make any of the following orders: (a) an order that the landlord carry out specified repairs, (b) an order that the landlord reimburse the tenant an amount for urgent repairs carried out by the tenant. (2) Orders for repairs The Tribunal may make an order that the landlord carry out specified repairs only if it determines that the landlord has breached the obligation under this Act to maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. (3) The Tribunal must not determine that a landlord has breached the obligation unless it is satisfied that: (a) the landlord had notice of the need for the repair or ought reasonably to have known of the need for the repair, and (b) the landlord failed to act with reasonable diligence to have the repair carried out. (4) Reimbursement for urgent repairs The Tribunal may order that the landlord reimburse the tenant an amount for urgent repairs carried out by the tenant if it is satisfied that the landlord has failed to reimburse the tenant for the costs in accordance with this Division. (5) Payment of rent into Tribunal The Tribunal may order that all or part of the rent payable under a residential tenancy agreement be paid into the Tribunal until an order under this section has been complied with."
"Urgent repairs" is defined in s62 of the RTA, as: "any work needed to repair any one or more of the following: (a) burst water service, (b) an appliance, fitting or fixture that uses water or is used to supply water that is broken or not functioning properly, so that a substantial amount of water is being wasted, (c) a blocked or broken lavatory system, (d) a serious roof leak, (e) a gas leak, (f) a dangerous electrical fault, (g) flooding or serious flood damage, (h) serious storm or fire damage, (i) a failure or breakdown of the gas, electricity or water supply to the residential premises, (j) failure or breakdown of any essential service on the residential premises for hot water, cooking, heating, cooling or laundering, (k) any fault or damage that causes the residential premises to be unsafe or insecure, (l) any other damage prescribed by the regulations,"

Determination

I observed Mr Bulmash and Ms Tretiak as they gave evidence. I found Ms Tretiak credible and accept her evidence. I formed the impression that Mr Bulmash's evidence was coloured by his desire to promote his case and, while I do not find that Mr Bulmash deliberately lied to the Tribunal, I find that I cannot accept his evidence unless accepted by Ms Tretiak or corroborated by documentary evidence. Two particular examples where Mr Bulmash gave contradictory or inconsistent evidence are set out above [1] .
I will deal in turn with each of the claims made by Mr Bulmash.

Mould and damp

In respect of the claim that the apartment was uninhabitable by reason of mould and damp, I find that, although the photographic evidence tends to suggest that there was some mould in the apartment, the photographs do not suggest it was such as to render the apartment uninhabitable. It was suggested on behalf of the Respondent that Mr Bulmash's sub-tenants had overcrowded the apartment. Although this is a possible explanation for the occurrence of mould, there is no evidence to enable me to draw the conclusion that this had occurred.
On the evidence before me, I am not satisfied on the balance of probabilities that at any time the apartment became uninhabitable by reason of mould. Nor am I satisfied on the balance of probabilities that prior to 15 October 2015 the landlord had failed to maintain the premises in a reasonable state of repair. In particular I find the landlord repainted the premises in 2012 (utilising mould inhibiting paint on wet areas, as established by the tax invoice in respect of that work included in Exhibit 1). Mr Bulmash has put forward no evidence beyond his bare assertion to establish that the painter had used the wrong paint. I also find that the painter did not block the vent. I accept, on the basis of the photographs attached to Mr Bulmash's email of 27 August 2014 and photographs taken by the agent in September 2014 that there was at that time some mould present in the bathroom, one bedroom and the living room. However, Mr Bulmash has not produced any evidence of further complaints until 15 October 2015.
I find that the problem in 2014 was not as bad as Mr Bulmash now seeks to suggest and was addressed at the time by cleaning with mould spray.
I do not find that the mould occurred by reason of Mr Bulmash's sub-tenants overcrowding the apartment.
I find that the premises remained in a reasonable state of repair until October 2015. I find that the state of the paintwork had become such by 15 October 2015 that, had the requirements of s 65(3) been satisfied, Mr Bulmash would likely have succeeded in an application for orders that repairs be carried out. However, Mr Bulmash did not take that course. Rather, he took it upon himself to repaint the premises.
The Applicant founded his claim to payment of the cost of repainting, including his own time, on s65(1)(b) of the RTA. However that provision is applicable only to urgent repairs as defined in s62, which does not include painting.
The Applicant might be entitled to reimbursement of the cost of painting the premises if he had had the agreement of the owner (through the agents) that he would be reimbursed. The Applicant's claim in this regard is dependent upon the proposition that the work was approved by the agent and that the agent promised he would be reimbursed.
I do not accept Mr Bulmash's evidence concerning the alleged approval by the agents. Mr Bulmash's email of 15 October 2015 (in particular the last line) is quite inconsistent with the proposition that Mr Bulmash already had approval. It is clear in that email that Mr Bulmash was asking for approval. It is also clear that Mr Bulmash went ahead and performed the work without having obtained that approval. As he himself stated, he expected to recover that money through sub-letting the apartment over time. Mr Bulmash's expectation was disappointed because the landlord elected not to renew the lease but that was a risk that Mr Bulmash took.
There is no evidence before the Tribunal beyond Mr Bulmash's own assertions to support Mr Bulmash's claim to have sustained loss through having to compensate tenants for damage to their possessions or provide reductions in rent by reason of the condition of the premises. Mr Bulmash did not produce his rent ledger to establish that any such concessions were given to his sub-tenants or that the premises remained untenanted for any period. In the absence of any corroborating evidence I do not accept that Mr Bulmash did sustain such losses.
For this reason, I do not need to determine the question whether Mr Bulmash would have been entitled to recover such losses from the landlord. In accordance with the principles laid down in Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145, the landlord would only be liable for losses which were either arising naturally according to the usual course of things from the breach of contract itself or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as a probable result of a breach of it.
Pursuant to s74 of the RTA, Mr Bulmash required the Respondent's written consent to sub-let the premises. Mr Bulmash does not suggest he had obtained written consent. I do not accept Mr Bulmash's evidence that he had oral consent. Pursuant to s75(1) of the RTA the landlord was entitled to withhold consent to the sub-letting of the whole tenancy regardless whether it was reasonable to do so. Unless persuaded that the landlord had approved Mr Bulmash's sub-letting of the premises, I would not have been able to find that any loss of rent sustained by Mr Bulmash by reason of an inability to sub-let the premises (or a need to discount the rent payable by sub-tenants) satisfied either of the limbs of Hadley v Baxendale set out above.
Although Mr Bulmash did not explicitly seek any order pursuant to s44 of the RTA, I have considered whether I should make an order pursuant to that section. Pursuant to s44 of the RTA the Tribunal has jurisdiction to order that rent is excessive having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises. I consider that the general amenity of residential premises constitutes a facility provided with the premises. Pursuant to s45(2) of the RTA the Tribunal may order that rent must not exceed a specified amount and that the landlord repay rent paid in excess of the specified amount.
Pursuant to paragraph 44(5)(f) of the RTA, one of the matters that the Tribunal may have regard to in determining whether rent is excessive is any work done to the residential premises by or on behalf of the tenant.
Although, as noted, Mr Bulmash did not explicitly seek an order pursuant to s44 or s45, he did, in his "compensation request summary", seek a rent reduction by reason of the persistence of mould in the premises. Mr Bulmash is not a lawyer and was not legally represented. He cannot be expected to have identified with specificity and legal precision all possible bases for his claims.
When dealing with an applicant who is not legally represented, the Tribunal has an obligation to look at the complaints of the applicant "and endeavour to determine whether any legal basis, within the Tribunal's jurisdiction, for the application has been raised. The extent of the obligation in a particular case will depend on the circumstances." (Aceti v Burhan Pty Ltd t/as Garlicks Heating and Cooling [2015] NSWCATAP 55 at [30]).
Section 44(3) requires that an application for an order for reduction of rent must be made before the end of the tenancy. In this case, although the tenancy was on foot at the date of the hearing, the landlord had given notice of termination to Mr Bulmash and the tenancy was to end on 10 January 2016. Nevertheless, I am satisfied, having regard to the obligation in s38(4) of the Civil and Administrative Tribunal Act to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms, that Mr Bulmash's compensation request summary, which was filed with the Tribunal on 20 November 2015, before the end of the tenancy, was sufficient application for the purposes of s44(3).
Other factors the Tribunal may take into account on an application pursuant to s44 include "the general market level of rents for comparable premises in the locality or a similar locality" (paragraph 44(5)(a)). Neither party adduced evidence of comparable rents. I consider the respondent was on notice by reason of Mr Bulmash's compensation request summary that Mr Bulmash was seeking a reduction in rent and had the opportunity to adduce evidence of comparable rents had he thought it appropriate to do so.
The evidence adduced by Mr Bulmash does not persuade me, on the balance of probabilities that the mould apparent in the apartment in 2014 was such as to warrant a reduction in rent. Mr Bulmash tendered no documentary evidence to establish that, after the agents inspected the premises in September 2014, he made any further complaint until October 2015. I do not accept his evidence that he "contacted the real estate many times via phone, text messages, and emails and in person". Mr Bulmash produced no emails or text messages between September 2014 and October 2015 complaining of mould or damp. He has adduced no evidence to corroborate his claim to have contacted the agents in person or by telephone.
I find that the state of the premises was such that, as at 15 October 2015, a reduction in rent by reason of the reduction in facilities (being the loss of amenity arising from the state of the paintwork) was warranted. Having regard to the fact that the unsatisfactory state of the premises was remedied by the repainting work carried out by Mr Bulmash, I find that the reduction in rent should continue until the termination of the lease on 10 January 2016.
The rent payable under the lease was $550.00 per week. Doing the best I can in the absence of evidence of comparable rents, I find that the rent should be reduced by $25.00 per week from 15 October 2015 to 10 January 2016 (a period of 12 weeks and 3 days).
I will therefore order, pursuant to s 44(1)(b) of the Residential Tenancies Act 2010 (NSW), that the rent payable pursuant to the Residential Tenancy Agreement between the applicant and the respondent dated 6 August 2012 is excessive having regard to the reduction in amenity of the premises arising from the deterioration of paintwork by 15 October 2015 and that from 15 October 2015 to 10 January 2016 the rent must not exceed $525.00 per week. I will also order pursuant to s45(2) of the Residential Tenancies Act 2010 (NSW) that the respondent repay to the applicant the sum of $301.71 being the excess rent paid by the applicant from 15 October 2015 to 10 January 2016.
If any issue arises between the parties regarding unpaid rent or the disposition of the bond, either of the parties will be entitled to make a further application to the Tribunal.

Cooktop

It was common ground between the parties that in October 2015 the cooktop was malfunctioning by reason of a crack. In the absence of evidence of the source of the crack, I would infer that the most likely cause of the crack was misuse by Mr Bulmash's sub-tenants. To avoid this inference, Mr Bulmash asserted that there was a crack in the cooktop at the commencement of the tenancy which grew over time. I cannot accept that evidence. The cooktop was serviced in early 2015, at which time there was no mention of any damage to the cooktop.
As Mr Bulmash was sub-letting the premises he is unable to provide any persuasive assurance that his sub-tenants did not misuse the cooktop.
I find on the balance of probabilities that the cooktop was damaged by Mr Bulmash's sub-tenants.
The cooktop has been replaced by the landlord and I find there is no basis to award Mr Bulmash any compensation for the period when the cooktop was malfunctioning.

Hassle and damage to clothing

As I have not found that there was a breach of the tenancy agreement by reason of the presence of mould, I need not consider Mr Bulmash's claims in respect of hassle or damage to his clothing (either the claim to reimbursement of 10% of a year's rent as stated in the initial Application, or the $2,000.00 set out in the document filed as part of Exhibit A). I am in any event not satisfied that such damages are compensable.
Even if I had accepted that Mr Bulmash was inconvenienced as a result of the condition of the premises, I would not have been satisfied that any such loss was either such as would arise naturally from a breach of the tenancy agreement or within the reasonable contemplation of the parties at the time of entry into the tenancy agreement as a likely result of a breach of the agreement, as required under the principles laid down in Hadley v Baxendale. I am not satisfied that, even if I had accepted that the landlord had failed prior to October 2015 to maintain the premises by failing to deal with mould and damp, the inconvenience to Mr Bulmash (even if compensable) was so great as to warrant compensation in any amount let alone $2,000.00.
I therefore order: 1. Pursuant to section 44(1)(b) of the Residential Tenancies Act 2010 (NSW), that the rent payable pursuant to the Residential Tenancy Agreement between the applicant and the respondent dated 6 August 2012 is excessive having regard to the reduction in amenity of the premises arising from the deterioration of paintwork by 15 October 2015 and that from 15 October 2015 to 10 January 2016 the rent must not exceed $525.00 per week. 2. Pursuant to section 45(2) of the Residential Tenancies Act 2010 (NSW) that the respondent repay to the applicant the sum of $301.71 being the excess rent paid by the applicant from 15 October 2015 to 10 January 2016. 3. The application is otherwise dismissed. D A C Robertson Senior Member Civil and Administrative Tribunal of NSW 3 March 2016

Endnote

In paragraphs 28 and 33 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: 28 April 2016

Residential Tenancies Act 2010(NSW)ss 44, 45, 62, 63, 64, 65, 74, 75

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