Caperleris v Anastasopoulos

NCAT Appeal Panel|2018-08-28

Solicitors: Central Coast Family Law (Appellant) Ronald Czinner & Co (Respondents) File Number(s): AP 18/23541 Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 24 April 2018 Before: D Charles, Senior Member File Number(s): COM 16/08682, Com 17/13576

Introduction

This appeal concerns a retail lease of a shop in Barrenjoey Road, Palm Beach (premises).
The lease provided that it was to commence on 7 December 2012 for a period of 12 months, terminating on 6 December 2013. The premises were part of a complex of shops. The premises were known as shop 2. The lease included use of a storeroom which was part of the complex (storeroom).

Notice of Appeal, Reply to Appeal

The appellant filed a notice of appeal on 24 May 2018.
The Notice of Appeal was filed out of time. An extension of time was sought by the appellant. In support of that application, the appellant said the Notice of Appeal had been forwarded by email to the Tribunal on 21 May 2018, the last day for lodging the appeal within time, the original documents being sent by post.
At the hearing of the appeal, the respondents' Counsel was asked whether the respondents opposed an extension of time. The Appeal Panel was advised that Counsel had no instructions to consent to the extension of time.
Having regard to the principles set out in Jackson v New South Wales Housing Corporation [2014] NSWCATAP 22, we are satisfied that a reasonable explanation has been provided and that there is no relevant prejudice to the respondents. Consequently, an order should be made extending time to lodge the Notice of Appeal until 24 May 2018.
The Notice of Appeal raised seven grounds.
Grounds 1-3 assert that the Tribunal made material errors of fact and drew impermissible inferences.
Grounds 4 and 5 assert that the Tribunal failed to have regard to material considerations or reached a conclusion which was, on the facts, unreasonable or plainly unjust. Those findings related to the state of the premises, the respondent's conduct in carrying out repairs and the rejection of the evidence of the appellant, her lay witnesses and her expert.
Ground 6 is that the Tribunal incorrectly concluded cl 7.1 was a non-essential term or, alternatively, failed to conclude that it was an intermediate-term which had been breached in a manner which permitted termination of the contract.
Grounds 7 asserts that the Tribunal failed to have regard to material considerations or reached a conclusion which was, on the facts, unreasonable or plainly unjust, in concluding there was no evidentiary foundation to quantify any loss or damage suffered by the appellant and no evidence from which the Tribunal might infer there was a reduction in the profits made by the appellant in operating her business which she suffered in consequence of the breaches alleged.
The appellant seeks leave to appeal. She asserts the decision was not fair and equitable, against the weight of evidence and that there was significant new evidence now available that was not reasonably available at the time of the hearing.
In relation to the new evidence, this was an affidavit of the appellant (now known as Mona Gabrael) which is signed but not dated. That affidavit has exhibited to it a USB device "containing a digital copy of a video recording" taken on or about 8 March 2013. Also attached as an Annexure is a transcription of a conversation apparently recorded on the video.
Counsel for the appellant conceded in his submissions to the Appeal Panel that the video was available to the appellant and could have been provided as evidence in the proceedings at first instance. In these circumstances, it could not be said the evidence now sought to be adduced "was not reasonably available at the time the proceedings under appeal were being dealt with": see cl 12(1)(c) of the Civil and Administrative Tribunal Act, 2013 (NSW) (NCAT Act). Consequently leave to adduce this fresh evidence should be refused: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [22] and following.
The respondents filed a Reply to Appeal.
In short, the respondents say that grounds 1-5 raise questions for which leave to appeal is required. Some of those questions include the assessment of witnesses in cross-examination. To the extent leave is required it should be refused.
Further, insofar as ground 4 raised a challenge on the basis the Tribunal failed to deal with each and every item of evidence, the Tribunal's reasons adequately explain the basis for the decision and the Tribunal "did not have to deal with every minutia of a report that mentioned various possibilities".
In relation to grounds 6 and 7, no relevant error of law has been identified. In connection with the issue of whether or not clause 7.1 was an essential term or otherwise if, breached, gave rise to an entitlement to terminate, it was unnecessary for the Tribunal to consider this issue having regard to the findings of fact relating to the alleged breach. Otherwise, the reasons provided by the Tribunal were adequate.
The parties filed written submissions in relation to their respective positions. In addition, the parties appeared by Counsel at the hearing, each of whom provided oral submissions.

Consideration

There is a right of appeal on a question of law. Otherwise, leave to appeal is required: see s 80((2)(b) of the NCAT Act. As the appeal is from a decision of the Consumer and Commercial Division, leave to appeal may only be granted if the appellant can demonstrate she may have suffered a substantial miscarriage of justice: see Sch 4 cl 12 of the NCAT Act. The principles applicable to the grant of leave are set out in the decision of Collins v Urban [2014] NSWCATAP 17.
There is no dispute about these matters.
It is convenient to deal with the grounds of appeal and submissions made under three headings: 1. Water ingress; 2. Entitlement to terminate. 3. Damages;
Prior to doing so, we should deal with three matters.
First, we note that there was no challenge to the construction of cl 7.1 of the lease, namely that any obligation of the respondents to maintain or repair the property pursuant to this clause was an obligation to maintain the premises in a condition that it was in at the commencement of the lease. There was also no challenge to the Tribunal's conclusion there was no warranty as to the fitness of the premises for the purpose to which the lessee intends to use it. Similarly, there was no challenge to the decision of D & D Ventures upon which the Tribunal relied.
Rather, the effect of the oral submissions at the hearing of the appeal was that the Tribunal should have concluded from the evidence before it that the premises had deteriorated and that the respondents were liable for a failure to maintain or repair the premises so as to prevent water ingress.
This general submission appears contrary to the position adopted by the appellant in the proceedings at first instance. As pointed out by Counsel for the respondents, in her submissions in reply at first instance (at [33]), when responding to the respondents' submissions concerning cl 8.2 of the lease (which relates to damage to the property and abatement of rent), the appellant said: In reply to paragraph 132, the submissions of the respondent (sic) in respect of clause 8.2 of the lease should not be accepted as the clause only applies where the property "is damaged". Read sensibly, that clause should only apply where there is damage of the sort contemplated after commencement of the lease. That is not the case here, the nature of the damage here, is really that which was in existence, on the [appellant's] case, prior to the commencement of the lease.
We will return to this issue below.
The second matter to be addressed is the requirement for adequate reasons. This arose in the context of the appellant saying the Tribunal failed to take account of particular evidence or explain why particular evidence was not accepted by the Tribunal.
As indicated above, there is a right of appeal on a question of law and otherwise leave to appeal is required. It is unclear from the submissions made by the appellant whether the basis of challenge to the Tribunal's decision is inadequate reasons, which if established would be an error of law, or whether the basis of challenge is one for which leave to appeal is required. The respondents appear to have addressed both aspects. In these circumstances, it is appropriate to examine the reasons for decision both as to adequacy and on the aspect of whether the appellant may have suffered a substantial miscarriage of justice for which leave should be granted.
The principles applicable for the disposition of this appeal when examining the adequacy of reasons can be summarised as follows: 1. The reasons need not necessarily be lengthy or elaborate: Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 (Beale) per Meagher JA at 443; 2. It is unnecessary to refer to all evidence led in the proceedings to indicate which was accepted or rejected. The extent of the duty to record the evidence given and the findings made depends upon the circumstances of the individual case: Mifsud v Campbell (1991) 21 NSWLR 725 (Mifsud) per Samuels JA at 728; 3. Reference should be made to relevant evidence although there is no need to refer to that evidence in detail, especially where it is clear the evidence has been considered: Beale at 443; 4. Where one set of evidence is accepted over a conflicting set of significant evidence, the decision-maker should set out their findings as to how the decision-maker comes to accept the one over the other: Beale at 443; 5. In resolving such conflicts, it is not always necessary to make explicit findings on each disputed piece of evidence, especially if the inference as to what is found is appropriately clear: Beale 443. 6. On appeal, the reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287, approved by the High Court in Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 272, a principle applicable to review on appeal in respect of a trial judge's reasoning as well as administrative decisions: Small v K & R Fabrications (W'gong) Pty Ltd [2016] NSWCA 70 per Basten JA ay [54] (McColl JA and Simpson JA agreeing).
The third matter to note is that various grounds of appeal assert that the conclusions of the Tribunal were "on the facts, unreasonable or plainly unjust".
At first blush, such a ground would suggest a challenge on the basis of the principles set out in Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 (Wednesbury) or Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 (Li). However, it seems to us from the written submissions of the appellant that such a challenge is not made in the present case. At [20] of the appellant's submissions dated 20 July 2018, Counsel for the appellant states: The cumulative effect of the Grounds of Appeal set out below will establish: a. The Tribunal erred in the manner in which it considered the evidence, and made findings against the weight of the evidence; b. To find that key evidentiary matters in the Appellant's case were not made out; c. To reason that there was no breach of the contract between the parties; d. And that therefore damages did not follow.
That is, the appellant's challenge is limited to the content of the reasons provided and the manner in which the Tribunal evaluated the evidence in reaching its conclusion. Certainly, no reference was made to any authorities or the principles that might be applicable to challenging a decision on the basis it was "unreasonable or plainly unjust".
In any event, having regard to the conclusions we have reached below concerning the Tribunal's evaluation of the evidence and the reasons given, it becomes unnecessary to consider this issue any further.

Water ingress

The findings concerning water ingress and its nature and extent are the subject of appeal grounds 1, 2, 3 and 4. In addition, ground 5 challenges the Tribunal's conclusion that the respondents attempted to carry out repairs in a timely manner.
The parties made separate submissions in respect of each of these grounds. However, as they all raise issues concerning the evaluation of evidence from particular witnesses, it is appropriate to deal with these grounds together. The submissions of the parties were as follows.

Submissions- Ground 1

By ground 1 the appellant challenges the Tribunal's finding that the appellant exaggerated her evidence as to the frequency and effect of water ingress into shop 2 and her evidence was unreliable. The appellant says that the Tribunal did not accord proper weight to the evidence of her and her witnesses Ms Mackay, Mr Nicholson, Mr Caperleris, Mr Kirkland and her expert, Ms Coe.
In relation to the evidence of Ms Mackay, having identified the evidence relied upon, the appellant says that more weight should have been given to that evidence because Ms Mackay was a non-party witness and her evidence was consistent with that of the appellant.
In relation to the evidence of Mr Nicholson, the appellant says his evidence was accepted without objection and he was not cross-examined. This evidence was to the effect that during his time there were a number of leaks in the roof of the building.
In relation to the evidence of Mr Caperleris, notwithstanding his concession in cross-examination recorded at [39] of the decision, the appellant says his evidence supported a conclusion that there had been water ingress into the premises.
In relation to the evidence of Mr Kirkland, his evidence was rejected as an expert witness, however the appellant says the Tribunal failed to accord any weight to the observations recorded at page 17 of his statement, which observations were consistent with water ingress as suggested by the appellant generally and inconsistent with the Tribunal's finding at [47] of the decision.
No particular submission is made under this ground in connection with the evidence of Ms Coe.
Rather, the appellant says that this evidence, when properly weighed, does not support the conclusion that the leaks to shop 2 were infrequent or that minimal water entered shop 2. Further, and in any event, the ingress of water must have impacted upon the appellant's business of a gourmet food store.
In reply, the respondents say that there was no issue concerning flooding of the shop 2. In this regard the respondents refer to the concession of the appellant in cross-examination found on page 24.6 of the revised typed transcript provided to the Appeal Panel.
Otherwise, the respondents say that it is clear from the reasons for decision that the Tribunal had regard to the evidence of all of the witnesses.
The respondent said that each of the appellant, Mr Caperleris (her ex-husband and friend) and Ms Mackay (who in oral evidence described herself as a friend) were not, relevantly, independent disinterested persons.
In relation to Ms Mackay's evidence, the respondent said that she was imprecise about whether the problems identified were in respect of shop 2. In any event, Ms Mackay conceded in cross-examination that shop 2 had only two leaks and they were minor.
In relation to the evidence of Mr Nicholson, his evidence related to problems with a different shop and did not, at any point, identify issues with shop 2. Consequently, his evidence was irrelevant. Further, his evidence was in fact objected to and he failed to attend when requested to do so for cross examination. In these circumstances his statement should not have been accepted into evidence or should have been given no weight.
In relation to Mr Kirkland, he was rejected as an expert witness. He inspected the premises after all leaking and flooding events and could give no direct observations during the relevant period.
In relation to the evidence of Ms Coe, this evidence was couched in terms of "possibility", reflected a need for "further calculations or numerical modelling… to quantify the likely extent of water ingress", and was of no assistance in determining what actually happened.

Submissions- Ground 2

Ground 2 challenges the Tribunal's conclusion that there was leaking and not flooding in the storeroom and that any leaks in the walls of the storeroom were minor and of little disruption to the appellant's business.
The appellant accepted at [42] of her submissions that "[l]ogically, the finding that the water ingress in the storeroom was not as significant as suggested on the evidence of the [appellant] affects the finding that the business of the appellant was not affected".
However, the appellant again referred to her written evidence and that of Mr Nicholson, Ms Mackay, Mr Kirkland and the report of Ms Coe. She submitted this evidence "suggests that it is at least possible that there would be flooding in the storeroom, and at its highest, that there was flooding in the storeroom, in the manner suggested on the appellant's case". Consequently, the appellant says there was an error arising from the weight placed on the evidence of the respondents.
In reply, the respondents rely on the content of their written submissions provided in the proceedings at first instance. They draw a distinction between the claim of flooding and the claim of leaking, the respondents' submissions at first instance dealing with these matters separately.
The respondents say that most of the evidence to which the appellant refers related to flooding and not leaking in the storeroom and that the appellant has not challenged the Tribunal's finding at [59] of the decision, those findings relating to "flooding in the storeroom". In relation to the finding at [52] concerning leaking of the storeroom, the respondent says they were "reasonable findings based on the evidence of all witnesses and the submissions made to the Tribunal".

Submissions- Ground 3

The appellant says that the Tribunal found that the appellant had "ample opportunity to photograph the purported flooding in the storeroom but failed to do so" and inappropriately drew an adverse inference against the appellant because of this failure.
The respondents say that this is not what occurred. Rather, the respondent's point to an email from the appellant dated 23 February 2013 (Ms Tourtouros' statement sworn 24 August 2016 and exhibit page 22) which recorded the appellant had taken photographs, which photographs were not in fact in evidence.
As the respondents point out, it is clear from [56] of the decision concerning the absence of photographs, the Tribunal was not suggesting that the failure to take photographs was a matter which counted against the appellant. Rather, the Tribunal found there were emails recording she had taken photographs which had not been produced at the hearing.
It was in these circumstances that the Tribunal analysed the photographic evidence and reached its conclusions concerning the nature and extent of flooding as recorded at [59] of the decision. It seems clear to us from the decision that, in part, this evidence was relied upon by the Tribunal to conclude the appellant had "exaggerated the frequency of any flooding in the storeroom" and in making its findings concerning the nature and extent of flooding otherwise depicted in photographs tendered in evidence.

Submissions- Ground 4

This ground of appeal relates to the report provided by Ms Coe and an alleged failure to consider this evidence "in light of the total preponderance of the evidence". At [52] of her submissions in the appeal, the appellant makes reference to various paragraphs of Ms Coe's report recording evidence about the locality, the structure of the building and rainfall events. The matters identified in the submissions from Ms Coe's report include: 52 … d. The rear wall of the storeroom presents a possible point of water ingress: [36] e. It is possible that the wall is not completely waterproof; [37] … g. Ponded water may have seeped down the block work wall; [40] h. It is possible that rainfall lead to water ingress into the storeroom; [40]
The appellant says that these statements by Ms Coe, who was accepted as an expert, when considered with the other evidence of the appellant, "supported or enabled inferences with respect to the evidence of the appellant". Further, the appellant submits that there was no "meaningful intellectual engagement with the evidence". In this regard the appellant relied on the decision of the Full Court of the Federal Court of Australia in Minister for Immigration and Multicultural Affairs v Khadgi and Anr [2010] FCFCA 145 at [57].
Consequently, the appellant says the Tribunal was in error in determining the extent of flooding or leaking, and in reaching its conclusion at [35] of the decision that the evidence of Ms Coe did not assist the Tribunal in determining this issue.
In reply, the respondents again rely on the submissions made in the proceedings at first instance on 18 December 2018, particularly paragraphs 19 to 21. In this regard, the respondents noted at paragraph 19 of those submissions that Ms Coe had given evidence at paragraphs 53.1 which included the following statement: It is possible that rainfall during the period January to March 2013 caused water to enter the Premises. It is not possible with the available information to state unequivocally that rain, stormwater or overland flow caused water to enter the Premises during that period.
In short, the respondents submitted that Ms Coe's evidence did not assist the appellant and the Tribunal was correct to reach this conclusion.

Submissions- Ground 5

Under this ground, the appellant challenges the conclusion of the Tribunal at [87] of the decision that the respondent took steps to repair any issues of water ingress brought to their attention in a timely manner.
The appellant says that the Tribunal should have concluded the initial complaint occurred as early as 27 January 2013, if not earlier, and that in a tradesperson was engaged to carry out any repairs before the appellant sought to terminate the lease. In this regard, the appellant seeks to rely on the evidence, to which we have referred above and rejected, which evidence is said to impeach the credit of the respondents' witness Mr Tourtouras.
In relation to this submission, we note the appellant purported to terminate the lease by notice dated 5 March 2013, about 6 weeks after the water ingress is said to have first been notified, in circumstances where there were, apparently, multiple rain events over a period of time: see, for example, decision at [53] and [54].
In reply, the respondents said that the appellant did not challenge the finding of the Tribunal at [82] of the decision. There, the Tribunal said: I am satisfied in the circumstances that repairs could not be done until the premises were thoroughly dry and that the lessors took reasonable steps to try to limit any inconvenience to the applicant lessee until proper repairs could be arranged. The lessors had no control over the weather. I find that they complied with their obligations under clause 7.1.
The respondents say that when [87] of the decision is read in the context of [82], no relevant breach had been established. Further, the respondents say the appellant has not identified any evidence upon which she relies in suggesting the decision made by the Tribunal was in fact against the weight of the evidence to which the Tribunal referred.
In this regard we note the evidence of Mr Toutouros at paragraphs 59 and following of his affidavit sworn 26 August 2016 (referred to at [87] of the decision) concerns attendances by Mr Toutouros at the premises and conversations with the appellant and those associated with her, about proposals to repair certain concrete surfaces, which repairs required those surfaces to be dry. We also note there was evidence from Mr Tourtouros that he had first attended the premises to investigate the flooding/leaking issues on 31 January 2013 and had subsequently carried out inspections : see paragraph 28 and following of his affidavit sworn 26 August 2016. This evidence included an attendance at the premises on 9 February 2013 to ascertain whether the "storeroom… was still wet" and to take various preparatory steps to clean the concrete roof "to have it ready … to put the Megapoxy on it when it dried": see paragraph 33 of his affidavit.

Decision on Grounds 1-5

As outlined above, the appellant relied on the evidence of six witnesses whose evidence, the appellant said, the Tribunal failed to give adequate weight and/or properly consider. These were the appellant, Ms Mackay, Mr Nicholson, Mr Caperleris, Mr Kirkland and Ms Coe.
The Tribunal identified what evidence the appellant had provided in the proceedings at first instance at [23] of the decision. There is no suggestion that this list of the appellant's evidence or the list of the respondent's evidence recorded at [25] of the decision was incomplete. At [27] the Tribunal says it considered all of the material which had been filed together with written and oral submissions provided by the party's legal representatives.
The Tribunal considered the evidence in connection with water ingress in relation to each of shop 2 and the storeroom. In doing so, the Tribunal dealt with the evidence of each of the appellant's witnesses to which we have referred above.
In relation to the appellant's evidence concerning shop 2, this evidence is dealt with throughout the reasons for decision, but particularly at [43] and following.
As noted at [48] the appellant said at paragraph 122 of her affidavit sworn 16 June 2016 that "from late January onwards, each time it rained I would have to spend anywhere between 1 and 4 hours cleaning up water in the shop". The Tribunal rejected this evidence as being exaggerated as to the frequency and effect of any water ingress for the following reasons: 1. The meteorological records, which were in evidence, did not support rain events on the day as asserted: decision at [43]-[44]; 2. There had been significant rain events in December 2012, after the appellant took possession of shop 2, however the appellant "did not notice any water entering shop 2 during December 2012": decision at [46]. Consequently, the Tribunal was not satisfied that "each time it rained, water entered shop 2": decision at [46]. 3. Other evidence from the appellant was indicative of her not remembering correctly what had occurred or when. In this regard the Tribunal found that the appellant's evidence that she had spoken to Mrs Tourtouras on 22 October 2012 could not have been correct, as Mrs Tourtouras was overseas at that time. Decision at [45].
In relation to the appellant's evidence concerning the storeroom, the Tribunal considered the appellant's evidence in relation to both leaking of the ceiling and walls and flooding.
Again, the Tribunal noted that there had been significant periods of rain in December 2012 with no leaking observed by the appellant. The Tribunal concluded that some of the dampness in the storeroom arose from its lack of ventilation, a finding not challenged on appeal: decision at [49]. The Tribunal also accepted evidence from the respondent in concluding that leaking was coming from a screw hole made by an electrician employed by the appellant to install a light fitting in the storeroom and that this work was the cause of leaking near the light fitting: decision at [50]. Again this finding was not challenged in the appeal.
Having regard to these matters, the Tribunal concluded the applicant's recollection of the incidences of leaking in the storeroom was "not reliable as a result of the passage of time" and, in any event, the leaking of the walls was minor and of little disruption to the appellant's business and that the leaking of the ceiling was from a light fitting or installed by the appellant's electrician: decision at [52].
As to flooding in the storeroom, the Tribunal noted the appellant had said in cross-examination that this had occurred "up to nineteen times" however the Tribunal rejected this evidence for a number of reasons.
First, the Tribunal found that the first flooding event was not notified until 29 January 2013, as set out in paragraph 81 of the appellant's affidavit sworn 16 June 2016. This, the Tribunal found, was in circumstances where ex-tropical cyclone Oswald had caused widespread flooding in the Sydney metropolitan area: decision at [53]. Secondly, the appellant's email of 23 February 2013 (page 32 of the exhibit to the affidavit of Mrs Tourtouras sworn 24 August 2016) only references one flooding event "some weeks ago": decision at [54]. Thirdly, while there was evidence of flooding on 1 March 2013 (contained in paragraph 13 of Ms Mackay's affidavit affirmed 11 June 2016) and on 3 March 2013 (contained in an email from the appellant to Mrs Tourtouras of that date-page 46 of the exhibit to the affidavit of Mrs Tourtouras sworn 24 August 2016), there were no email complaints by the appellant of flooding in the storeroom on 4, 5 or 6 March 2013: decision at [55]. Fourthly, having evaluated the photographic evidence and the cross-examination of the appellant concerning concessions made about the extent and depth of the flooding, the Tribunal concluded flooding was not as extensive as asserted by the appellant: decision at [56]. Fifthly, the Tribunal noted that the appellant could have provided further photographic evidence, which was the subject of the application to adduce fresh evidence in this appeal to which we have referred above, and drew an adverse inference against the appellant in light of her failure to produce this material.
Consequently, on the issue of flooding in the storeroom, the Tribunal concluded that the appellant had exaggerated the frequency of flooding. While flooding had occurred on 29 January, 24 February, 1 March and possibly 2 and 3 March 2013, The Tribunal said the appellant's recollection of the depth of flooding was not reliable and should not be accepted: decision at [59].
By ground 1, the appellant says the Tribunal made a "significant and material error in concluding that the appellant exaggerated the frequency and effect of water incursions into shop 2. This was said, in part, to arise from the emphasis or weight placed on the evidence of the respondents who should properly be regarded as interested persons are not independent. In this regard. It also said to arise from the failure of the Tribunal to have regard to the evidence of the appellant's witnesses, a matter to which we will refer to below.
Similarly, by ground 2, the appellant says the Tribunal erroneously found the flooding of the storeroom and the leaking of its walls was minor and of little disruption to the appellant's business. Again, the appellant refers to the evidence of herself and her other witnesses and says the evidence discloses that "it is at least possible there would be flooding into storeroom, and at its highest, that there was flooding in the storeroom, in the manner suggested by the appellant's case".
In relation to the rejection of the appellant's evidence, it is evident from the passages of the decision to which we have referred above that the Tribunal 1. considered the full extent of the evidence provided by the appellant; 2. evaluated that evidence against contrary evidence provided by the respondents and concessions made in cross-examination; 3. considered evidence from the respondent's other witnesses as to the water ingress events (for example the evidence of Ms Mackay); and 4. had regard to objective evidence in the form of photographic evidence and emails, 5. in reaching its conclusion that the evidence of the appellant was exaggerated both as to the nature and extent of water ingress in shop 2 and in the storeroom.
Having identified the evidence which it had received, the Tribunal provided logical reasons, supported by contemporaneous documents, for reaching this conclusion. In this sense, it could not be said the reasons provided for its decision were, in any relevant sense, inadequate.
Further, we are not satisfied that the conclusions reached were not fair and equitable, were against the weight of evidence or that the appellant may have suffered a substantial miscarriage of justice. There has been no unorthodox approach in making factual findings, nor could it be said from the analysis to which we have been referred that there were factual errors that were unreasonably arrived at or clearly mistaken. It could not be said that "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 make": Collins at [69] and following.
This view is supported by review of the manner in which the Tribunal dealt with the evidence of the appellant's other witnesses.
In relation to the evidence of Ms Mackay, it is clear from the reasons that this evidence was not rejected in its totality. We have made reference to some parts of the decision where the Tribunal had regard to Ms Mackay's evidence in reaching its conclusions. However, again, this evidence needed to be and was evaluated by the Tribunal in the context of photographic and other objective material concerning rainfall events and the nature and extent of water ingress.
At [40] of the decision the Tribunal noted the concessions of Ms Mackay in cross-examination to the effect that there were two leaks to shop 2 and both these leaks were small and also noted that, despite evidence in cross-examination that water fell "on some of the baked goods and on some caps and T-shirts and caused some damage" that there was no reference in her evidence in chief to damage to any goods in shop 2. This evidence, the Tribunal evaluated against the evidence of Mrs Tourtouras and Mr Tourtouras concerning the nature and extent of water ingress in shop 2: decision at [41]-[42].
In relation to the flooding in the storeroom, at [55] of the decision the Tribunal analysed the evidence of Ms Mackay and concluded her evidence was not reliable. In doing so the Tribunal did not accept her evidence concerning the depth of flooding. It found that it was improbable the flooding was as severe as she asserted, having regard to the time taken to mop the premises and having regard to other evidence concerning clean up times for other flooding events and the evidence of the respondents' witnesses.
These conclusions were consistent with photographic evidence provided to the Tribunal.
In relation to the evidence of Mr Nicholson, the appellant submitted that his evidence was admitted without objection and was not cross-examined.
Mr Nicholson's evidence was that he had previously worked in the McGrath Real Estate Agency (McGrath) until about 2011. He gave evidence in his affidavit on 14 June 2016 that McGrath had occupied a shop in the complex and also had use of the storage area. He said there was a leaking roof and flooding in the storage area. In relation to the flooding, he indicated that Mr Tourtouras had carried out some repairs to the storage area at the time McGrath were in occupation.
In relation to the evidence of Mr Nicholson, the Tribunal recorded in its decision at [62] that the affidavit was admitted "over the respondents' objection" and that Mr Nicholson "did not attend the hearing and was not available to be cross-examined". The Tribunal reviewed this evidence and noted Mr Nicholson asserted Mr Toutouras never fixed the issue which he said had been raised. The Tribunal also noted that Mr Nicholson did not "claim to have ever told Mr Tourtouras that any of Mr Tourtouras's work in the storeroom to fix the problem was ineffective: decision at [62].
Against this evidence was the written and oral evidence of Mr Tourtouras denying that Mr Nicholson told him the storeroom was flooding and making reference to a conversation with Mr Nicholson on 7 March 2016 to the effect that Mr Nicholson had said "we never had any leaking or flooding in the storeroom". Also, Mr Toutouras referred to a conversation with a Mr King, a subsequent manager at McGraths who had said there was no flooding in the storeroom while he was working in shop 3. That evidence was corroborated by an email from Mr King to Mrs Toutouras dated 8 April 2016 (Annexure O to the affidavit of Mr Toutouras sworn 26 August 2016).
It seems clear, contrary to the initial submissions of the appellant, a matter corrected in the submissions in reply, that the evidence of Mr Nicholson was not admitted without objection. Further, the conclusions reached by the Tribunal were available on the evidence and corroborated by documentary evidence in circumstances where Mr Nicholson did not attend for the purpose of being cross-examined.
In relation to the evidence of Mr Caperleris, he is the former husband of the appellant. He gave evidence in an affidavit sworn 13 June 2016 of a conversation with the former owner of a business called Palm Beach Art Gallery called Anne. That evidence was to the effect that sometimes when it rains, water comes in the shop and that this problem has been "fixed a few times". He also gave evidence about the storeroom smelling "musty and airless". He says he observed brown marks on the wall which he assumed was from "water having entered the room". Next, he gives evidence of a conversation with Mr Toutouras and the appellant about these problems and that Mr Toutouras said he took care of the building and that he had previously fixed leaks. Finally, at paragraph 14 of his affidavit Mr Caperleris gave evidence concerning a rain event on 24 February 2013 and observations made at shop 2 on that day
At [39] of the decision, the Tribunal dealt with paragraph 14 of Mr Caperleris's June affidavit. There he said he observed it was raining heavily and rain water was spraying into the shop above the large glass sliding door on 24 February 2013. However, in cross-examination he conceded that the rain had stopped by the time he arrived at shop 2, evidence which the Tribunal found could not be reconciled. Evidence had also been given concerning flooding on 24 February 2013: see decision at [54]. Because of the concessions made in cross-examination, the Tribunal concluded it could not rely on the evidence of Mr Caperleris: decision at [39] and [54].
As is clear from these paragraphs, the Tribunal explained its reasoning process for rejecting this witness's evidence in the form of his affidavit as being unreliable and preferred the evidence of the respondents.
In relation to the evidence of Mr Kirkland, as stated above, he purported to give expert evidence. However, his report was not accepted on this basis. Otherwise, observations were made by him concerning the state of the premises which the appellant said supported her version of events. One matter to which our attention was drawn was photograph "T" in his statement dated 15 March 2013. This photograph was relied upon to support water ingress. The photograph was captioned "These water stains are above the entrance to the store in the awning soffit".
The Appeal Panel pointed out that a "soffit" usually refers to the open underside of a roof, balcony or overhang outside the building walls extending from the external wall to the end of the roof or building line, not an internal ceiling area. In those circumstances, the evidence to which we were referred could not, in any event, depict damage within the premises. Suffice to say, the photograph in the report to which we were referred provided little assistance in dealing with this matter, that photograph being black-and-white and granular in nature, from which we were unable to discern its actual location within the building.
Be that as it may, at [36] the Tribunal noted that Mr Kirkland's opinions were "based at least partly on information given to him by the [appellant]" and that such information was not disclosed. The Tribunal also noted that Mr Kirkland did not observe any water leaking or flooding. Consequently, the Tribunal found the evidence of Mr Kirkland was "of little, if any, utility in determining whether there was any leaking or flooding in shop 2 in the period from 8 December 2012 to 15 March 2013, or of assessing the frequency and extent of any water ingress (whether leaking or flooding) during that period".
It seems clear that the Tribunal took account of the photographic evidence provided by the parties in its various forms.
No challenge was made to the conclusion of the Tribunal that Mr Kirkland was not relevantly qualified as an expert. However, reference was made in written submissions and in oral submissions to particular pages of the report annexed to Mr Kirkland's affidavit sworn 14 June 2016 which are said to set out "lay observations". These pages variously contain photographs of the premises and their surrounds.
While this photographic material depicts the premises, there is nothing in the material to which we have been referred which would lead us to conclude the findings made concerning the utility of this evidence in respect of the nature and extent of flooding at particular times during which the appellant occupied the premises were in error.
Lastly, in relation to this aspect, we note the appellant says that this evidence from Mr Kirkland and the other witnesses shows a decline in state of the premises.
As we indicated above, the case advanced at first instance by the appellant was that there had been non-disclosure in the Lessors Disclosure Statement as to the existing state of the premises and the fact it was lacking in water tightness and had been leaking prior to commencement of the lease. As the appellant's submissions in reply in the proceedings at first instance make clear, the case originally being advanced was that the premises was in a state of disrepair at the commencement of the lease, the appellant originally claiming the respondent had misrepresented the state of the premises at the commencement of the lease.
Insofar as the appellant seeks to advance a different case on appeal, namely that the premises fell into a state of disrepair during the period of the lease in consequence of which an obligation to repair arose under cl 7.1, the respondents object to this different case now been put on appeal. In our view consistent with the principles in Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 at [9], the appellant should not be allowed to raise a different case on appeal, because there is potentially a factual contest about these matters which was not dealt with in the proceedings at first instance.
The final matter to deal with concerns the evidence of Ms Coe. Her report was accepted as expert evidence. The appellant relies particularly on paragraphs 32 to 52 of her report. Ms Coe's evidence is relied upon in relation to ground 1 and 2 and is also the subject of separate ground 4. Under this latter ground, the appellant's complaint is that the Tribunal failed to engage in any meaningful way with the evidence which she provided.
As stated by the Tribunal, for example at [35] of the decision, Ms Coe points to the possibility of certain things, however no definitive opinions are expressed. As is clear from the reasons, one of the significant issues in dispute was not the fact of water ingress, but its frequency and extent. In this regard the Tribunal concluded at [35] that the evidence of Ms Coe did not "assist the Tribunal in determining the issue of the extent of flooding or leaking". The Tribunal explained why it formed this view. It did so based on statements in Ms Coe's report, such as at paragraph 53.2 where she said: The likely extent of water ingress is not possible to quantify without detailed calculations or numerical modelling.
It seems clear from this statement that Ms Coe had no opinion about the nature and extent of the flooding that had occurred nor was she able to predict, based on her observations of the building recorded in her report, the probable extent of water ingress in consequence of a rain event.
As the respondents pointed out in their submissions, the report of Ms Coe contains several references to "possibility" but we have not been referred to any particular evidence which might demonstrate error in the Tribunal's conclusion as to the nature and extent of the flooding nor its preference for the version of events provided by the respondents.
In these circumstances, we see no error in the manner in which the Tribunal evaluated the evidence as a whole, nor in its preference for the evidence of the respondents in concluding that the nature and extent of any leaking and flooding was minor and did not affect the business operations of the appellant. Further, the findings in relation to the limited damage to stock (13 caps) supports this conclusion.
In relation to ground 3, as the respondents pointed out in their submissions, there was evidence of photographs which had been taken and which were not in evidence. It was the failure to produce these photographs which formed the basis of the adverse inference. In these circumstances, no error of the type articulated by the appellant has been demonstrated.
Finally, we should deal with ground 5, which relates to the conclusion concerning the time taken to carry out repairs.
The tenancy commenced in December 2012. The first occasion when significant leaking was identified was on about 29 January 2013. The Tribunal had evidence from the parties that there were further rain events causing some leaking and that the premises had not dried out, although work preparatory to effecting repairs had been undertaken by Mr Tourtouras in late January or early February. The notice of termination given by the appellant was dated 5 March 2013, nearly one month after complaint had first been made about the premises leaking.
The Tribunal concluded there was an obligation to carry out repairs within a reasonable time. The appellant did not challenge this conclusion under the lease. At [104] and following, the Tribunal concluded that, to the extent there was any obligation to carry out repairs (the Tribunal dealing with this matter on an alternative basis), this obligation had been discharged by the respondents.
Having regard to the factual findings and the timeframe within which all these events occurred, we are not satisfied any relevant error is established.
The Tribunal explained why it reached the particular conclusions it did in preferring the respondents' evidence. Consequently, we are not satisfied the reasons provided by the Tribunal were inadequate. Further, having regard to the evidence of the parties to which we have referred above, we are not satisfied that the appellant has demonstrated she may have suffered a substantial miscarriage of justice for which leave to appeal should be granted.
Accordingly, leave should be refused and these grounds of appeal fail.

Submissions- Ground 6

This ground relates to the Tribunal's conclusion that cl 7.1 was not an essential term and that the appellant was entitled to terminate the contract or, alternatively, whether there had been a breach of a non-essential term which nonetheless entitled termination. In this regard, the appellant accepted that it was necessary for her to succeed in relation to the challenges to factual findings in order to demonstrate a breach had in fact occurred.
The appellant said that the Tribunal concluded at [83] that cl 7.1 was not an essential term because only the appellant's obligations as lessee are essential terms having regard to the provisions of cl 12.5. The appellant said this conclusion was erroneous because the definition in cl 12.5 was an inclusive definition.
The appellant said the Tribunal should have given to cl 7.1 of the contract an interpretation having regard to its commercial purpose, and should have concluded the term was essential or, if an intermediate-term, was a term the breach of which would entitle the appellants to terminate the agreement.
There was also a reference in the appellant's written submissions at [63] to the Tribunal's finding that the only obligation was to maintain the premises that existed at the commencement of the lease. It is evident from this document that this submission was incomplete. However, as indicated above, when asked at the hearing about whether there was a challenge to this conclusion and the reasoning in D&D Ventures, the appellant's Counsel said this construction was not challenged.
In response, the respondents note the appellant did not challenge the findings concerning: 1. there being no warranty for fitness for purpose of the premises : decision at [79]; 2. the obligation to maintain premises in the state that existed at commencement of lease: decision at [80]; and 3. the obligation to repair only arises when lessors notified and thereafter lessor has reasonable time to carry out and complete repairs: decision at [82].
Secondly, the respondents say the appellant has not put any argument as to why clause 7.1 should be regarded as an essential term. To the extent it was suggested that this is because the custom of the appellant's business might be affected if the term was breached, this submission was not based on any evidence.
In any event, the respondent submitted cl 7.1 should not be regarded as essential or an intermediate-term, breach of which entitles termination, because cl 8.2 provides that if the premises cannot be used at all because of severe damage the tenant's only right is to a rent rebate, not to make a claim for set-up costs. In this regard the respondents relied on their submissions in reply filed in the proceedings at first instance on 30 January 2018 (January submissions) at paragraphs 50 to 70. In effect, the respondents submitted that cl 8.2, which provides for what should happen if the property is damaged, is an indicator that the obligation to maintain in cl 7.1 should not be interpreted as an essential term or a term the breach of which otherwise entitles termination.
The respondents also submitted that it could not be said that any breach of cl 7.1 would result in the appellant being "deprived of substantially the whole benefit which it was intended the (appellant) would derive from the lease": January submissions at para 67. Consequently, cl 7.1 could not be an essential term.
Finally, on the facts as found, any breach could only be considered as minor and would not thereby entitle termination for breach of an intermediate term.

Decision- Ground 6

The Tribunal said at [83] of its decision: Even if I decided the issue of breach of clause 7.1 differently, the lessors' obligations under clause 7.1 are not essential terms of the lease; only the lessee's obligations under the lease are essential terms of the lease (see clause 12.5). Being a non-essential term, if the lessors were in breach of clause 7.1 the applicant lessor did not have a right to terminate the lease on that basis; NC Seddon & MP Ellinghaus Cheshire and Fifoot's Law of Contract (9th Australian ED, 2008, Lexis-Nexis Butterworth) at 105. The applicant was obliged to continue with the lease. If grounds existed, the applicant could have exercised her remedy under clause 8.2 and sought compensation by way of reduction of rent.
We accept the appellant's submission that the Tribunal was in error in so insofar as it decided that cl 7.1 was not an essential term because only the appellant's obligations as lessee are essential terms having regard to the provisions of cl 12.5,. As the appellant points out, the introductory words of clause 12.5 say: Essential terms of this lease include -
Clearly, this clause does not seek to prescribe all obligations which might be regarded as essential terms or conditions of the lease which would entitle another party to terminate the lease. The fact cl 12.5 only refers to obligations of the appellant/lessee in the inclusive definition is not of itself a reason to conclude that cl 7.1 is not an essential term.
However, in our view the Tribunal was still correct to conclude that cl 7.1 was not an essential term of the lease. It could not be said that this provision is in any sense a fundamental obligation, any breach of which would go to the root of the contract and entitle a party to terminate. Self-evidently, an obligation to maintain the building in good condition and serviceable repair may arise from a multitude of different circumstances, and vary in degree and significance.
Consequently, the Tribunal was correct in its ultimate conclusion that cl 7.1 was not a condition entitling termination for any breach.
As to the right to terminate for breach of a non-essential term, the High Court made it clear that a serious breach of a non-essential term, at least in so far as it might be described as a "intermediate term", may give rise to a right to terminate: see Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61; 233 CLR 115 at [49]-[56].
While the Tribunal made reference to the authors of Cheshire and Fifoot's Law of Contract to support the proposition that a lessor did not have a right to terminate the lease for breach of a non-essential term, in our view there is no reason in principle why a term obliging a landlord to maintain premises could not be a "intermediate term" of the type described by the High Court in Koompahtoo. In such cases it is necessary to consider the seriousness of the particular breach or breaches: see eg Koompahtoo at [71].
In the present case, it is unnecessary to finally resolve whether the particular term is one which falls within the description of intermediate term. This is because, even if we found it was such a term, the facts as found by the Tribunal do not justify a finding of a breach of a type serious enough to entitle the appellant to terminate the contract. As the appellant has failed on the challenges to the factual findings, this ground of appeal fails.

Damages

The last ground of challenge relates to the findings in respect of damages.

Submissions- Ground 7

Ground 7 provides: The Tribunal failed to consider the weight of the evidence of the appellant as to her loss and damage suffered which was caused by the relevant conduct of the respondents.
The appellant said that the Tribunal imposed too high a standard of proof, and should have found she suffered some loss or damage. In this regard, the appellant reverts to the earlier submissions concerning the Tribunal's findings of exaggeration which she submits "affects the conclusions reached with respect to loss and damage at paragraphs 90 to 103, and in particular 92".
At [92] of the decision the Tribunal said: There is no evidence from which the Tribunal might infer that there was any reduction in the profits made by the [appellant's] business during the weeks the [appellant] was in occupation of shop 2 and the storeroom. For the reasons already given, the leaking was minor and had no effect on the (appellant's) business being able to trade. Throughout all the allegations of leaking and flooding the only stock damage claimed by the applicant was damage to the in caps: see email of 2 March 2013 at page 42 of the Exhibit 2 Mrs Tourtouros's affidavit. There is no written record of any claim for damage to other stock.
The appellant continues that on "any plain view" of the evidence referred to at [101] of the decision, the appellant must have expended some funds and incurred some loss in the establishment of her business, even though evidence of some of the expenses may be "amenable to being impugned or deemed not to have come up to proof". Consequently, the Tribunal was in error in rejecting all claims.
We note at [101] of the decision the Tribunal identifies the Exhibit and the paragraphs of the appellant's affidavit sworn 16 June 2016 containing evidence of damage. During the course of the hearing we were also referred to the affidavit of the appellant sworn 16 June 2016. Tab 24 of the exhibit to that affidavit was said to contain the relevant evidence. However, the documents behind this tab are no more than a table of all monies spent by the appellant in relation to her business and a bundle of supporting invoices. There are no documents to which we have otherwise been referred which analysed her trading activities, profit and loss or any expert evidence assessing losses in consequence of her inability to operate her business because of water ingress to the premises. Counsel for the appellant conceded in oral submissions there was no evidence of profits and losses of the business.
Finally, we note the only finding made by the Tribunal was the damage to 13 caps, to which we have referred above.
In reply, the respondents said that the case run at first instance was not a claim for damages for loss of business custom as a result of the water leaks. Rather, it was a claim for all expenses "she had ever sunk into the enterprise".
Again, the respondents relied on these submissions dated 18 December 2017 (paragraphs 216-242) and the January submissions (paragraphs 113-120).
These submissions analyse the evidence given by the appellant from which the respondents contend any losses suffered were for reasons quite independent of any water ingress to the premises and that on the evidence in this case no relevant loss had been demonstrated to arise from any water ingress issue. The respondents also point to the effect of attempts to renegotiate the lease on terms more favourable to the appellant for reasons unconnected with the alleged breaches in this case, and that any losses incurred on the sale of plant and equipment are either not properly detailed or there was a failure to mitigate loss and damage.
In these circumstances, the respondents say the Tribunal was correct to reject the appellant's claim for damages.

Decision- Ground 7

It is unnecessary to determine this issue having regard to the conclusions we have reached above.
However, for completeness we should indicate our view that no relevant error is shown.
Insofar as there was a claim for damages arising from the interruption to business operations causing the appellant to suffer economic loss, there was no evidence about the financial position of the appellant, particularly her income and expenses associated with the business nor any evidence concerning the prospective profits she could have made but for the flooding and water ingress which she said it occurred. Certainly the evidence relied upon by her Counsel in written submissions in no way satisfies the requirements of appropriate evidence about her trading activities. The document itself is described as "Cost of Fitout Palm Beach Pantry".
Insofar as the claim was for damages to goods, as set out above, the Tribunal noted that the only stock damage claimed in connection with these events was damage to 13 caps. In its reasons the Tribunal referenced the evidence where those claims were made. This finding was not challenged on appeal.
However, we were not referred to any evidence concerning the cost of these caps and therefore have no basis to assess the value. Accordingly, other than nominal damages for breach of contract, there is no basis to assess the actual loss even if liability was established. Further, and in any event, such amount is likely to be minimal.
It follows that this ground of appeal is not made out.

Orders

Having regard to our reasons, leave to appeal should be refused and the appeal should be dismissed.
The claim was for an amount in excess of $30,000 and, as the proceedings at first instance were also in respect of a claim for an amount in excess of $30,000, the provisions of r38A of the Civil and Administrative tribunal Rules 2014 (NSW) and therefore r 38 apply to this appeal. That is, the Tribunal has a general discretion to award costs. Accordingly, subject to any application of the parties for a different order, we will make an order that the appellant pay the respondent's costs of the appeal as agreed or assessed on an ordinary basis.
If either party contends for a different result, they should make an appropriate application in writing within 7 days from the date of publication of these reasons. Such an application must be accompanied by any evidence and submissions in support, including on the question of whether the hearing of the costs application should be dispensed with and an order made pursuant to s 50(2) of the NCAT Act.
Otherwise, the orders of the Appeal Panel are as follows: 1. The time to file the Notice of Appeal is extended to 24 May 2018. 2. Leave to appeal is refused and the appeal is dismissed. 3. The appellant is to pay the respondent's cost of the appeal, such costs to be as agreed or assessed on an ordinary basis.

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 03 October 2018 - [104] amended to clarify that statement referred to 'initial' submissions which were later corrected. 23 October 2018 - Parties amended to reflect all parties in matter below. 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: 23 October 2018

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