Charrouf v NSW Land and Housing Corporation

Charrouf v NSW Land and Housing Corporation - [2023] NSWCATCD 109 - NSWCATCD 2023 case summary — Zoe

[5]

Mould

I accept Mr Charrouf's evidence that about 6 months after moving into the premises mould appeared in the main bedroom and in his son's bedroom. It continued to spread.
At one point water began to leak through the ceiling into his bedroom. He reported the leak and mould to the landlord some time in 2018 and contractors attempted unsuccessfully to repair the leak on a number of occasions. In evidence Mr Charrouf said: 'I made so many complaints over the phone.'
The last time his bedroom leaked was in 2019.
In 2020 Mr Charrouf painted the interior of the house and treated it with Zinsser mould killing paint. He purchased all the materials at his own expense.
Since painting the premises, the leak has not reoccurred and mould is no longer visible. However, the smell of mould persists in the clothes cupboard.
Because of the leak and the extend of the mould in the premises, Mr Charrouf believes that active mould is present in the wall and roof cavities.
On 8 July 2021, in the same email to 'Camille', Mr Charrouf notified the landlord again about the presence of mould in the premises. Ms Tannis confirmed the landlord did receive that email. Her record indicates that the email said in part: 'Mould affecting health and family asthma.'
According to Mr Charrouf, he telephoned the landlord every 2 weeks to follow up his concerns. Ms Tassis has no record of any such telephone calls.
The visits by contractors after February 2023 regarding the asbestos were also for the purpose of investigating Mr Charrouf's concerns about mould.
The landlord provided a report about the condition of the tiled roof dated 25 July 2023.
It notes that the glaze on the terracotta tiles is in 'poor' condition. It states: 'Roof is no longer leaking but in very poor condition. Glazing on tiles is wearing and tiles are becoming pourus (sic). Ridge capping needs to be removed, re bed and repointed. Spot replace approx. 30 tiles and pressure wash recommended for short term repair. Roof replacement is recommended for long term fix.'
Photographs attached appear to show damaged tiles and damaged ridge capping.

[7]

Rent reduction due to reduction or withdrawal by the landlord of any goods, services or facilities

Section 44 of the Act provides relevantly: 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) … (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.
The tenant may make such an application any time before the end of the tenancy (section 44(3)).
An order for a rent reduction is limited to a 12 month period (section 44(6)).
Further, in determining whether rent is excessive, as specified in section 44(5) of the Act, the Tribunal may have regard to the following factors: (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, … (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).
The general amenity of residential premises constitutes a facility provided with the premises: Bulmash v Webster [2016] NSWCATCD 23 at [52].
In Eliezer v Residential Tribunal and Ors [2001] NSWSC 1092 McClellan J considered what constituted goods, services and facilities in respect of a similar provision in the Residential Tenancies Act, 1987. His Honour said at [37]: 'As to what constitutes a reduction, in our view this means the goods, services or facilities are of a qualitative or quantitative standard which is less than what a landlord is required to provide under a residential tenancy agreement.'
The reduction or withdrawal must be caused by the landlord.
A landlord's failure to attend to repairs with reasonable diligence can amount to a reduction or withdrawal of services (see, for example, Biskupic v Allen [2019] NSWCATAP 102).
In Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 the Appeal Panel recognised at [63] that where the landlord has notice or ought reasonably be aware of the need for repairs but fails to act with reasonable diligence to have the repair carried out, an act or omission by the landlord giving rise to the state of disrepair can amount to a reduction or withdrawal of goods, services or facilities.
In cases where the Tribunal has found in favour of a tenant and awarded compensation or a rent reduction due to the presence of mould, the evidence established the presence of a physical defect to the premises: see, for example, Capponi v Bridge Housing Limited [2021] NSWCATCD 17; Kazacos Investments Pty Ltd atf Kazacos Investments Trust v Maher [2021] NSWCATAP 219; Andrew Fletcher and Song Fletcher v Luke Bunbury [2015] NSWCATCD 60; O'Brien v Carlo-Stella [2022] NSWCATCD 12.

[8]

Compensation for breach of quiet enjoyment

The Tribunal's power to make an order that requires a party to a residential tenancy agreement to pay the other party compensation is found in sub-section 187(1)(d) of the Act.
Although section 187 sets out the order-making powers of the Tribunal, those powers do not exist in abstract. They are only enlivened when a substantive provision of the Act is engaged.
In other words, for one of the parties to obtain compensation, they must establish that the other party has breached its obligations under the Act, and that the party's breach caused the damage or loss.
Any damage and loss claimed as a result of breach of the RTA must be a reasonably foreseeable consequence of that breach: Hadley v Baxendale [1854] 9 Ex 341.
Section 50 of the Act states relevantly: (1) A tenant is entitled to quiet enjoyment of the residential premises without interruption by the landlord or any person claiming by, through or under the landlord or having superior title (such as a head landlord) to that of the landlord. (2) A landlord or landlord's agent must not interfere with, or cause or permit any interference with,the reasonable peace, comfort or privacy of the tenant in using the residential premises.
A claim for compensation for breach of quiet enjoyment in section 50 is different to a rent reduction under section 44 (Kork v Merheb [2021] NSWCATAP 349 at [66]) and remedy separate losses suffered by the tenant.
As explained above, an order that rent is excessive under section 44(1)(b) proceeds on the basis that the physical characteristics or qualities of the premises have been withdrawn or reduced such as to affect the tenant's use of the premises.
If both are proven, the tenant would be entitled to damages for loss of enjoyment, amenity or use and a rent reduction for withdrawal or reduction of facilities.
The Appeal Panel has noted that, because in such circumstances there are overlapping considerations, care must be taken to avoid double compensation: Kork v Merheb [2021] NSWCATAP 349 at [66] and [69].

[11]

Leak and mould

In 2018 the tenant put the landlord on notice of a leak in the master bedroom and mould spreading in the premises.
The likely cause of the mould was the leak and moisture caused by physical defects to the roof, being broken and porous tiles.
The landlord did not satisfactorily address these repairs and therefore in 2020 the tenant acted to mitigate his loss and paint and treat the interior of the premises at his own expense.
On 8 July 2021 the tenant again notified the landlord of the suspected presence of mould and the concerns for the health of his family.
A photograph on page 10 of the landlord's documents indicates that the landlord had knowledge of the poor condition of the roof following an inspection on 15 November 2021.
In February 2023 the landlord acted to investigate and address the mould concerns.
There is no explanation for the delay of 1 year and 3 months, or longer, if the period from first notification in 2018 is considered.
When asked by the Tribunal why it took that amount of time to respond to the notification, Ms Tannis replied: 'I can't comment.'
When asked by the Tribunal whether she believed the landlord responded to the tenant's notifications with reasonable diligence, Ms Tannis replied: 'I can't comment.'
Considering the well-known health risks associated with mould and the impact on the amenity of occupants, I find that the landlord failed to act with reasonable diligence in attending to the mould, in breach of its obligations pursuant to section 63 of the Act.
Given the fact that mould was present throughout the interior of the premises until Mr Charrouf painted; the porous condition of the roof; and the landlord's delay in attending to the repairs, mould is most likely still present in the roof and wall cavities.
The landlord's delay in attending to the repairs has caused a reduction in facilities because the qualitative standard of the premises, infected by mould, was less than what a landlord is required to provide under a residential tenancy agreement.

[13]

Extension of time

The combined effect of section 190(1) of the Act and r 39(9) of the Residential Tenancies Regulation 2019 (NSW) is that a landlord or a tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within three months after the applicant becomes aware of the breach. The focus is on the time the applicant becomes aware of the breach.
On the tenant's own evidence, he first became aware of the landlord's alleged breach regarding the cracked asbestos in 2020, and the mould earlier, in around 2018.
The alleged breaches are therefore ongoing, first occurring in around 2018 and recurring each day during the tenancy.
The tenant's application is therefore clearly within time in respect of the 3-month period prior to 3 May 2023 when his application was made.
However, to pursue any claim for compensation from the landlord prior to 3 February 2023 he requires an extension of time to be granted pursuant to section 41 of the Civil and Administrative Tribunal Act 2013 (NSW).
The Tribunal's discretion to grant an extension of time is unfettered but it must be exercised judicially having regard to established legal principle. In short summary, time limits are to be strictly enforced unless to do so would work an injustice to an applicant.
The relevant considerations are the length of the delay, the applicant's explanation for the delay, whether the respondent would suffer prejudice if time were to be extended, and the merit of the applicant's claim.
If the delay is relatively short the applicant is required to establish that their claim is fairly arguable. If the delay is extensive, it is necessary for the applicant to establish that their claim has substantial merit: see generally Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22.
In the course of the hearing the parties were invited to make submissions on the issue of whether time should be extended to enable the tenant to pursue his compensation claim. The tenant submitted that time should be extended.
Ms Tassis stated that the landlord did not object to an extension of time and did not have any specific submissions to offer.
Mr Charrouf's application regarding both the mould and asbestos is several years outside the 3 month time limit. This lengthy delay weighs against the exercise of the discretion to extend time.
Mr Charrouf submitted that the reason for his delay was his ignorance of the relevant law.
While ignorance of the law is not usually a reasonable excuse, I consider that it is in the circumstances of this case. English is not Mr Charrouf's first language. He required extensive use of the interpreter at the hearing. He is a migrant to this country and, as he told the Tribunal: 'I never thought I could take the government to court.'
I consider that Mr Charrouf's relative social disadvantage explains his ignorance of the legal system.
Moreover, Mr Charrouf did take steps to assert his rights under the tenancy agreement, complaining to his local Member of Parliament, but: 'They never told me I could go to the Tribunal.'
Nor, he said, did the landlord, despite his many complaints and notifications: 'They should have told me.'
I consider that Mr Charrouf's claim for breach of quiet enjoyment has, on a prima facie basis, substantial merit. It is based on the inconvenience and distress he has suffered due to the significant reduction in the amenity of the premises. Similarly, his claim for economic loss is for out of pocket expenses associated with painting the premises due to the landlord's failure to maintain the premises.
There is no evidence that the landlord would be prejudiced if an extension of time was granted. When questioned on this point by the Tribunal, Ms Tassis answered that, yes, there would be prejudice. But when questioned further to identify the specific prejudice, Ms Tassis said that she could not.
In these circumstances and considering that the landlord did not oppose the application for an extension of time, the Tribunal grants Mr Charrouf an extension of time to bring his claim for compensation.

[14]

Did the landlord breach the tenant's right to quiet enjoyment?

Mr Charrouf has already been compensated for the loss of amenity by way of a rent reduction. However, I accept that he has suffered a loss of enjoyment in other ways.
A report by Dr Liu dated 22 February 2023 states that the mould in the premises has caused an exacerbation of Mr Charrouf's asthma and that: "His blood results also showed positive aspergillus antibodies and allergic reaction … he could develop serious complications from ongoing aspergillus exposure and cause serious infection. I strongly recommend Mr Charrouf to move away from his current house …"("D").
Aspergillus is a common type of mould.
There is also medical evidence (including a report by Dr Abdalla dated 27 January 2023) that Mr Charrouf's 4 children have developed an allergic condition due to mould in the roof, including coughing, sneezing, itchy throat and eyes and respiratory distress.
To the extent that Mr Charrouf may be claiming that the landlord's breach has caused him or his family physical (or mental) illness, that claim must be dismissed. This is because a claim for non-economic loss such as pain and suffering cannot be maintained due to the limitation of section 16 of the Civil Liability Act 2002 (NSW): see also Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 at [78]-[80].
An order for compensation for loss of enjoyment includes distress, anxiety and disappointment which is not consequential upon physical injury or psychiatric illness and is therefore not captured by the restrictions in the Civil Liability Act 2002.
The distress and inconvenience of living with the mould and asbestos have been significant for Mr Charrouf over an extended period of time.
The physical effects on Mr Charrouf and his children and the time taken in caring for them meant that the benefits to be enjoyed from otherwise living in the residential premises was diminished.
I am satisfied that the landlord's extended failure to attend to the asbestos and mould caused Mr Charrouf mental suffering short of personal injury. He worried very much about the obvious health risks to himself and his young family.
He experienced the distress of receiving medical advice to remove his family from the poor environment, and the frustration of having no realistic alternative accommodation.
He described the intense distress he felt watching his wife and his children 'crying for the first 6 months' when the mould appeared because they saw him debilitated by asthma and coughing.
Additional work was required beyond ordinary cleaning to remove the mould and maintain the walls in a reasonable state. This would have reduced the time available to the tenant to occupy the house for purposes other than those associated with cleaning.
Mr Charrouf used his own time to remediate the mould, painting the entire interior, a significant undertaking.
The mould has damaged personal property and clothing, and although there is no claim for reimbursement, this has caused inconvenience and upset.
Mr Charrouf incurred significant inconvenience and frustration by his frequent notifications to the landlord about the asbestos and mould. This was exacerbated by the landlord's apparent disinterest and failure to respond in a timely manner.
I am satisfied that this is damage which flows naturally from the landlord's breach. It is a form of non-economic loss for which the tenant is entitled to be compensated.
The Tribunal concludes that Mr Charrouf is entitled to an order under sub-section 187(1)(d) of the Act that will require the landlord to pay him compensation in the amount of $4,500.00 for the landlord's breach of his right to quiet enjoyment.

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