Cannone v McNair

Grounds of appeal

1. The Notice of Appeal lodged on 7 February 2020 challenged the primary compensation order (order 1). It was not disputed that the Notice of Appeal was lodged within the time laid down in Rule 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW) for the commencement of an appeal in residential tenancy proceedings.
2. The grounds for the appellant's challenge were, in summary, as follows, discerned from the notice of appeal which had apparently been prepared by the appellant without legal assistance, in accordance with the approach outlined in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, at [12]: 1. The primary member erred in law by giving inadequate reasons for the finding that the landlord's breach of s 63 caused the alleged loss and for the assessment of the amount of that loss. 2. The primary member erred in law by taking into account an irrelevant consideration being an expert report prepared (the landlord said by illegal entry) months after the tenancy ended and without proper opportunity for response. 3. The primary member erred in law in taking into account such report when the landlord, in breach of procedural fairness, was not notified of the tenants' reliance upon it with a reasonable opportunity to respond. 4. The primary member erred in law by failing to take into account that the photographic equipment was in a room (the dining room) that was not mentioned as containing mould on surfaces other than the equipment inside the containers, in the various contemporary reports. 5. The primary member erred in law by failing to take into account that there was no evidence as to when the mould occurred because there was no proper evidence as to when the equipment was last inspected prior to 17 April 2019 when the mould was first discovered or as to the state of the equipment when it was stored in the containers (eg, was it damp?). 6. The primary member erred in law by failing to take into account that there was no evidence of the proper form of storage or of the age, condition at time of purchase, maintenance and service of the equipment which might have prevented the mould occurring or causing so much damage that the cost of replacement and/or repair was as awarded, being the total amount claimed for repair/replacement. 7. Leave to appeal from the primary decision (a decision in the Consumer and Commercial Decision) ought to be granted because the primary decision was not fair and equitable, and against the weight of evidence, substantially for the same reasons as in (4) to (6) together with the facts that: where "light mould" growth was first noticed on 17 April 2019 was in the bedroom adjacent to the tenants' shed which they had placed against the wall of the premises. 8. There were other stated grounds which were repetitive of or ancillary to the foregoing, or which were irrelevant to the claim as found such as challenging knowledge of use of the equipment for generating income (lost income was not claimed).
3. The notice of appeal conceded that the landlord ought "in good faith" to reimburse the tenant $20 per week for the term of the tenancy, totalling $600. It was not clear if this had been taken into account in the sum of unpaid rent claimed by the landlord. The tenants said they were happy to accept that on top of the existing order, from which it may be inferred it was not credited in the original calculation of unpaid rent. In those circumstances we have decided to note the landlord's concession.
4. The reply to the appeal filed 21 February 2020 said that the tenants were "willing to accept" the primary ruling, "However, if an appeal is successful by [the landlord] then I may consider a counter appeal". No cross-appeal was filed; any such cross-appeal would be out of time; it is not a reason justifying an extension of time for filing a cross appeal that a party wishes to see what happens on the appeal. The other reason given - that the tenants were told at the directions hearing they would not get new replacement costs, their understanding that they needed to mitigate their losses and that they gave the cheapest mix of repair and replacement costs in what was awarded - would not on its face justify success on a cross-appeal and in fact was (in the last two elements) a correct and proper approach to measuring their loss.
5. No party supplied transcript of the primary hearing, only the documentary evidence was included in the papers filed by the parties.

Applicable legal principles

1. Section 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (CATA) states: "Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds."
2. Clause 12 of Schedule 4 to CATA states: An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
3. A Division decision is a primary decision of the Consumer and Commercial Division. The primary decision here is such a decision.
4. A question of law may include, not only an error in ascertaining the legal principle or in applying it to the facts of the case, but also taking into account an irrelevant consideration or not taking into account a relevant consideration, which includes not making a finding on an ingredient or central issue required to make out a claimed entitlement to relief: see CEO of Customs v AMI Toyota Ltd (2000) 102 FCR 578 (Full Fed Ct), [2000] FCA 1343 at [45], applying the statement of principle in Craig v South Australia (1995) 184 CLR 163 at 179.
5. These categories are not exhaustive of errors of law that give rise to an appeal as of right. In Prendergast at [13], the Appeal Panel enunciated the following as specifically included: 1. whether the Tribunal provided adequate reasons; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether it applied a wrong principle of law; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account a relevant (that is, a mandatory) consideration; 6. whether it took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; and 8. whether the decision was legally unreasonable.
6. The "no evidence" ground must identify that there is no, or substantially inadequate, evidence to support a "critical" or an "ultimate" fact in order to constitute a jurisdictional error (a form of error of law): AAI Ltd t/as GIO v McGiffen (2016) 77 MVR 348, [2016] NSWCA 229 at [81]; Jegatheeswaran v Minister for Immigration & Multicultural Affairs (2001) 194 ALR 263, [2001] FCA 865 at [52]-[56].
7. A failure to deal with evidence may also in the appropriate circumstances be characterised as a failure to have regard to a relevant consideration or a failure to have regard to critical evidence. It is generally not mandatory to consider particular evidence: Rodger v De Gelder (2015) 71 MVR 514, [2015] NSWCA 211 at [86]; Allianz Australia Insurance Ltd v Cervantes (2012) 61 MVR 443, [2012] NSWCA 244 at [15] per Basten JA (McColl and Macfarlan JJA agreeing). However, by CATA s 38(6)(a), the Tribunal "is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings." This obligation includes an obligation to have regard to material which has been disclosed to the Tribunal and which is relevant to the facts in issue, at least where that material is of some significance. Further, at common law, where a decision-maker ignores evidence which is critical to an issue in a case and contrary to an assertion of fact made by one party and accepted by the decision-maker, this is an error of law: Mifsud v Campbell (1991) 21 NSWLR 725 at 728; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [62]-[63]; Eadie v Harvey [2017] NSWCATAP 201 at [61]-[62].
8. The conclusion that a decision is vitiated for legal unreasonableness can be reached if the Appeal Panel comes to the view that no reasonable tribunal could have reached the primary decision on the material before it: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 230; Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 at 364 [68]). A failure properly to exercise a statutory discretion may be legally unreasonable if, upon the facts, the result is unreasonable or plainly unjust: Li (2013) 249 CLR 332 at 367 [76]). There is an analogy with the principle expressed in House v The King (1936) 55 CLR 499 at 505 that an appellate court may infer that there has been a failure properly to exercise a discretion "if upon the facts [the result] is unreasonable or plainly unjust" and legal unreasonableness as a ground of judicial review: Li at 367 [76]. Further, there is some authority to the effect that unreasonableness as a ground of review may apply to factual findings, although this has not been finally resolved: see Pilbara Infrastructure Pty Ltd v Economic Regulation Authority [2014] WASC 346 at [153]; Wehi v Minister for Immigration and Border Protection [2018] FCA 1176 at [29]; Legal Profession Complaints Committee v Rayney [2017] WASCA 78 at [193].
9. Turning to errors of fact, in Collins v Urban [2014] NSWCATAP 17, after an extensive review from [65] onwards, an Appeal Panel stated at [76]-[79] and [84(2)] as follows: 76 Accordingly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in cl 12(1)(a), (b) or (c) where there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. 77 As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that: 1 If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12]. 2 The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]. … 78 If in either of those circumstances the appellant may have been deprived of a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the decision was against the weight of the evidence. 79 In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this then, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred - see the general discussion in Kyriakou v Long [2013] NSWSC 1890 at [32] and following concerning the corresponding provisions of the [statutory predecessor to CATA (s 68 of the Consumer Trader and Tenancy Tribunal Act)] and especially at [46] and [55]. 84 The general principles derived from these cases can be summarised as follows: … (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
10. The question of what constitutes significant new evidence not reasonably available at the time the proceedings under appeal were being dealt with was considered by an Appeal Panel in Owen v Kim [2017] NSWCATAP 26. In that appeal the Appeal Panel stated at [37] -[39]: 37 In Owners - SP 76269 v Draybi Bros Pty Ltd [2014] NSWCATAP 29 the Appeal Panel stated at [109] in connection with cl 12(1)(c) of Schedule 4 to the Civil and Administrative Tribunal Act: 'In order to fall within this paragraph the appellant must be able to point to evidence which: (1) is significant; and (2) has arisen and is new in the sense that it was not reasonably available at the time the proceedings below were being heard.' 38 In Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11 the Appeal Panel stated at [40 ]: 'The meaning of this clause was considered by the Appeal Panel in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. At [23] - [24] the Appeal Panel said: '23 Unlike the WIM Act, the expression "reasonably available" is not qualified by the words "to the party". This difference suggests that the test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence. For example, in Owners SP 76269 v Draybi Bros [2014] NSWCATAP 20 at [114] the Appeal Panel refused leave because, although the appellant may not have been aware of the evidence (being an email), it could have obtained the evidence by summons. In Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81 at [17] the Appeal Panel granted leave because the respondent to the appeal had fraudulently altered evidence. The party seeking leave under cl 12(1)(c) could not reasonably have had available to them the evidence that the report in question had been fraudulently altered at the time the proceedings were being dealt with by the Tribunal. That fact was not known to the appellant at the time of the hearing and could not reasonably be known due to fraud. 24 Each of these cases illustrates that something more than a party's incapacity to procure evidence is necessary to satisfy the requirements of cl 12(1)(c).' 39 As stated at [27] in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown: 'the issue is whether, objectively, the evidence has arisen since the hearing and was "not reasonably available" at the time of the hearing.'
11. In Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 an Appeal Panel stated at [10]: An appeal does not provide a losing party with the opportunity to run their case again except in the narrow circumstances which we have described. Mr Ryan has not satisfied us that those circumstances apply to his case and we refuse permission for him to appeal.
12. Even if the appellant establishes that he or she may have suffered a substantial miscarriage of justice within cl 12 of Sch 4 to the NCAT Act, the Appeal Panel has a discretion whether or not to grant leave under s 80(2) of that Act (see Pholi v Wearne [2014] NSWCATAP 78 at [32]) The matters summarised in Collins v Urban, above, at [84(2)] will come into play in the Panel's consideration of whether or not to exercise that discretion.
13. In dealing with errors of law and errors of fact, the Panel must be cognisant that the two can intermingle. The Panel must also be alert that, under Australian law, there is a different approach to matters between two situations. The first of these is where the particular decision has involved evaluation from findings of primary facts and the drawing of inferences therefrom, on which reasonable minds may differ but which must be accepted as legally correct unless overturned or varied on appeal. The second situation arises where there has been an exercise by the primary decision-maker of a discretion or choice embodied in the statute or law being applied, including as to whether relief is to be granted or refused and the form of relief: Minister for Immigration and Border Protection v SZVFW [2018] HCA 30 at [18], [20], [26], [30]-[32], [43]-[45], [48]-[49], [55]-[56], [85]-[87], [127]-[128], [153]-[155].

Error of law

1. We respectfully agree that the primary member erred in law in the manner described in aspects of the appeal grounds in (1), (2) and (4) to (6). We do not express, and see no need to express, an opinion on the allegation that evidence was illegally obtained or that the alleged manner of obtaining it should have affected its use as evidence in the circumstances of the case.
2. In our view, the primary member did not adequately express reasons that supported her conclusion that the tenants were entitled to compensation for the breach she found by the landlord of his obligations under RTA s 63. It is up to the tenants to prove their claim for compensation arising from a breach. The primary member did not disclose how she arrived at the conclusion that the photographic equipment was damaged by mould which had been reported in other rooms of the premises. The primary member also did not disclose how she arrived at her conclusions concerning the degree of damage to the equipment caused by mould in the premises.
3. In our view there were fundamental gaps in the tenants' proof that any breach of the landlord's obligations caused the relevant mould on the photographic equipment and the degree of damage that was caused, if damage was caused. On those matters the tenants bore the onus or burden of proof. It was necessary, to discharge that burden, to show the condition of the photographic equipment at a clear point before discovery of the mould, and preferably prior to the start of the tenancy, and compare that with the condition of the equipment after discovery of the mould. That was not done. What the tenants established, and the primary member referred to, was the cost of repairing or replacing the equipment in its current state, without any basis for attributing that entire cost to conduct of the landlord.
4. It was also the tenants' burden to demonstrate that mould in two rooms different from where the photographic equipment was stored could, on the balance of probabilities, have caused the mould on the equipment inside the storage containers in another room, which the tenants accepted was the sunniest room. They gave evidence that is why they stored the equipment there.
5. It was also the tenants' burden to demonstrate that mould which was first noticed in the premises on 17 April 2019 would spread between rooms and inside the containers so rapidly as to cause the level of damage that was visible on and inside the photographic equipment.
6. The foregoing would have needed to be established even if, as the primary member appears to have found (without detailed reasoning referring to the evidence relied upon) at [60]-[62], the evidence established that the landlord's initial inactivity (eg, in respect of cleaning the gutters and dealing appropriately with exhaust fans), caused the growth of the mould where it was noticed on 17 April 2019 and in the May report.
7. The foregoing would also have needed to be established even if the landlord had done everything properly to prevent the growth of mould but the mould grew simply because of the location and environs of the premises, a matter not canvassed in the primary reasons, or it appears by the parties, in those terms. Whether the landlord could be liable for damage by mould to a tenant's goods in those circumstances is not an issue that arises in this case. We do not seek to resolve that question, merely noting that it may depend upon the scope of the landlord's obligation under RTA s 52(1) to provide the premises "fit for habitation" and whether, in this context, that obligation is a continuing obligation.
8. In coming to the above conclusions we consider that the tenants' reliance upon the report prepared some months after the tenancy ended and even longer after the mould first appeared cannot be a relevant basis for findings about the landlord's obligations or what damage any breach of that obligation caused. This is so even though the expert at that late point inspected the premises and also looked at (as was said) contemporary photos taken by the tenants and by the experts who attended in June 2019.
9. Even if it was possible for the later expert to say that the earlier photos showed mould that was the same as present at the later expert's inspection, what caused that mould so many months before would not satisfactorily be demonstrated unless there was a depth of reasoning able to be tested that was not present in the later report. Such reasoning would need to establish that there was no alternative intervening explanation for the continuance of the mould when there had been intervening work. If the later report acknowledged the intervening work, it would need to establish at a point after that work why the mould continued to be present or to re-appear and to trace that to something for which the landlord was responsible before the work (which is when the mould alleged to cause the loss claimed allegedly emerged).

Grant of leave to appeal on questions of fact

1. We consider that leave to appeal should have been granted on grounds (4) to (6) if we had not come to the conclusion that they were errors of law. By reason of the matters the subject of these grounds, the decision was not fair and equitable and was against the weight of evidence. The tenants did not in our view discharge the burden to provide some weight of evidence to establish essential ingredients of the tenants' claimed relief. If those matters had properly been taken into account, the tenants would have been found to have failed to establish their claim to monetary compensation and the application would have been dismissed. That is a reasonably clear injustice to ground a grant of leave and to set aside the primary decision.

Appropriate relief on appeal

1. CATA s 81 provides that, in determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal. The section sets out a list of available orders which is not exhaustive. That list includes: allowing the appeal, setting aside the primary decision and remitting the whole or any part of the case to the primary level of the Tribunal for reconsideration, either with or without further evidence and in accord with the Appeal Panel's directions. CATA s 81(1)(d) provides that the Appeal Panel may set aside the decision under appeal and substitute another decision for it.
2. CATA s 80(3) provides that the Appeal Panel may decide to deal with an internal appeal by way of a new hearing and may permit such fresh evidence as it considers appropriate in the circumstances.
3. In our view the errors of law that we have identified can be cured by our re-hearing the matter even without the benefit of transcript of the primary hearing, and without further evidence.
4. The directions made by the Appeal Panel for the preparation of the appeal included a note directing the parties to be "prepared to put before the Appeal Panel any fresh evidence…and make any submissions in relation to the original application that they want to make".
5. The landlord raised his inability properly to respond to evidence of the tenants on grounds of procedural fairness. We have indicated in our reasons that the evidence of the tenants does not discharge the tenants' burden of proof in respect of essential elements of their case. There is no reason for the landlord to be given an opportunity to adduce further evidence to meet the tenants' evidence about which the landlord raised procedural fairness questions.
6. We identified in the course of the hearing material which was not before the primary member. Even if that material was the subject of a grant of leave to be taken into account, it did not provide and the tenants cannot provide further evidence on the essential matters we have identified above because such evidence was not and would not be contemporary and objective. As appeared in the tenants' submissions, any further evidence was and would be assertions about the state of the photographic equipment prior to the discovery of mould on it. There would be no opportunity for those assertions properly to be established or tested, including by expert evidence. The same applies to any current assertions about the historic state of the premises. An expert report which asserted continuity, if that could be obtained, may be possible and be possible to be tested. However, no basis was provided for any confidence in that prospect which would justify putting the parties to the cost and risk of a new primary hearing for the amount involved when special circumstances are required for an award of costs: Civil and Administrative Tribunal Act 2013 (NSW) s 60; Civil and Administrative Tribunal Rules 2014 (NSW) rule 38.
7. It should be clear that, in arriving at the foregoing conclusions concerning errors of law and fact, we have attributed no weight to the landlord's assertions about the effect of the tenants' conduct in terms of ventilation of the premises and location of a shed next to the premises. Those issues would therefore not need to be addressed further than the tenants have already done by, for example, pointing to the opening of windows and the space between the shed (which was under an awning) and the wall of the premises.
8. We have also attributed no weight to the landlord's emphasis on change of the tenants' former occupation of photographer some years before. This in itself is no basis for an inference that the equipment was rarely inspected and used.
9. It is consistent with the guiding principle in CATA ss 3(d) and 36(1), that proceedings be resolved justly, quickly, cheaply and with as little formality as possible, that the matter therefore be brought to a conclusion because the parties cannot usefully provide further material to resolve it: cp Lee v Commissioner of Police, NSW Police Force [2017] NSWSC 1849 at [47].

Outcome on re-consideration of the merits

1. It will be clear from the foregoing reasons that we consider that the tenants failed to prove their case and their claim should be dismissed, except for noting that the landlord has conceded in the appeal that the tenants are entitled to a further $600 by way of rent reduction.

Orders

1. The orders we accordingly make are as follows: 1. Leave to Appeal is granted to the extent that leave is required. 2. Appeal allowed. 3. On re-determination by the Appeal Panel, set aside the primary order 1 made 20 January 2020 and in lieu dismiss the application except for the amendment to the respondent's name the subject of order 2 made 20 January 2020 and to note that the landlord has conceded in the appeal that he should pay the tenants $600 by way of rent reduction.

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: 30 June 2020