Choy v Rugsat

Relevant facts

1. The tenants rented a property from the landlords for over six years, which ended when they vacated the property on 17 April 2019. There followed email correspondence between the landlords' then agent Ms Jennifer Nelmida of Creative Property Agents (Creative) and the tenants about the return of the rental bond. Creative alleged that there was damage to the property which Creative said should be paid for by the tenants by use of the bond being applied to repairs, or by separate payment by the tenants. Those email exchanges ended inconclusively, however, on about 11 June 2019 Creative applied for and received the bond in full on behalf of the landlords.
2. In about mid-June 2019 the landlords engaged a new real estate agent, Raine & Horne Strathfield. This agent lodged the appeal and appeared at the appeal hearing on behalf of the landlords.
3. On 9 September 2019, the tenants commenced the proceedings below, for return of their rental bond. In their application they wrote: I believe that my bond money was taken unjustly and without my agreement. I therefore wish to object to the actions of the agent, and request that my bond be refunded to me… At no stage did the agent supply or refer to a condition report of the property. Indeed, the owner began work on the apartment before it was inspected, making a mess with his work, including sanding. I believe it was at this stage that the agent inspected the property. Subsequently I received another email stating: "Kitchen damaged QUOTE is $2600+GST as mentioned roughly on my previous email. However, as discussed your bond is only $1760 less cleaning amount $770 is $990 left. We'll get the landlord to accept this rather than seel the $2600+ GST from you since you have accepted the full bond to be released to the landlord." To my knowledge, I did not agree to this. I was given a blank form to sign at one stage, but don't know what that was for. As I have a poor grasp of English (my native language being Thai), a friend helped me to write this statement as I explained the situation to him. I did not understand (or have explained to me by the agent) the correct procedures in such matters.
4. It is significant that the tenants are Thai nationals and participated in these proceedings with the assistance of a Thai interpreter. In the emails that preceded the final email from the agent, set out by the tenant in the quotation above, the tenant had not agreed that the landlords were to take the rental bond in full. Notwithstanding this, the rental bond was released in full to the landlords' agent.

Issues

1. As observed above, the landlords contend that they were denied procedural fairness by not being notified of the 6 November hearing and not having the opportunity to appear.
2. In order to determine the appeal, one of the questions is when were the appellants notified of the 6 November decision below? Related to this, it is necessary to consider how they were informed of the 6 November decision and the evidence (if any) put before the Appeal Panel to prove these matters.
3. If there is no adequate evidence to support the assertion in the Notice of Appeal that the landlords learned of the 6 November decision on 14 February 2020 (or 19 February 2020), then an extension of time is required for them to appeal that decision (see [17] below). The issue is then whether the appellants should be granted an extension of time to lodge this appeal on 25 February 2020.

Procedural history

1. The tenants' application was first listed before the Tribunal on 26 September 2019. The tenants and the landlords' former agent Creative appeared. In the Notice of Orders made on 26 September 2019 the Member noted: It is noted that the managing agent has informed the Tribunal that the agency no longer manages the property. If this is the case the agent is to provide to the Tribunal and to the tenant on or before 03-Oct-2019 the current address for service for the landlord. If such details are not provided, the Tribunal will continue to serve notices of hearing and other correspondence on the former managing agent
2. Creative's email address was noted as the address for service of the landlords and that was the "current address for service" referred to by the Tribunal.
3. The matter next came before the Tribunal on 16 October 2019, at which time only the tenants appeared. The landlords' former agent had not provided any alternate address for service for the landlords. It is apparent from the Tribunal records that the Member on this occasion telephoned the former agent and obtained the names of the landlords and the new agent. No new address for service was, however, provided. The Member adjourned the proceedings again to give the landlords an opportunity to be heard on the application. The orders made on 16 October 2019 included: 2. The respondent's name Jennifer Nelmida, is amended to Robert and Mary Choy c/o Raine and Horne Strathfield. A separate written notice of the new hearing date will be sent to you in the near future. The tenants seek the return of the rental bond. The rental bond has been paid to the landlord on 18 April 2019. The tenants have filed this application for the return of the rental bond on 11 September 2019. The Tribunal has jurisdiction to hear and determine the claim. 1. [sic] The landlord is to provide to the tenant and Tribunal on or before 23 October 2019 a copy of the residential tenancy agreement, a copy of the ingoing and outgoing inspection report, a copy of invoices, quotations, rent ledger and other documents that the landlord seeks to rely upon in relation to the landlord's claim on the rental bond. The landlord's attention is drawn to section 165 of the Residential Tenancies Act 2010
4. The 16 October orders and Notice of Hearing were emailed to the landlords' former agent Creative. That was no doubt because no new address for service had been provided to the Tribunal as required by the orders and notations made on 26 September 2019.
5. On 6 November 2019 the matter came before the Tribunal for hearing. There was no appearance by the landlords. The presiding Member ordered the landlords to return the bond to the tenants by paying the amount of $1,760 to them. These orders were also sent to the email address of Creative, as no new address for service had been provided to the Tribunal.

When did the landlords learn of the 6 December decision?

1. Subrule 25(4) of the Civil and Administrative Rules is as follows: (4) Unless the Tribunal grants an extension under section 41 of the Act, an external or internal appeal must be lodged - (a) in the case where the enabling legislation specifies the period within which the appeal is to be made - within the period specified, or (b) in the case of an internal appeal against a decision made in residential proceedings - within 14 days from the day on which the appellant was notified of the decision or given reasons for the decision (whichever is the later), or (c) in any other case - within 28 days from the day on which the appellant was notified of the decision to be appealed or given reasons for the decision (whichever is the later).
2. These are residential proceedings. As such, the appeal was to be lodged within 14 days from the day on which the landlords were notified of the decision. As observed above, the Notice of Appeal states that the landlords became aware of the decision on 14 February 2020. If that is right, then the Notice of Appeal, lodged on 25 February 2020 was within time. If not, the landlords will require an extension of time to appeal.
3. The material provided by the landlords as to when they were notified of the 6 November decision is unsatisfactory and, to the extent that there is any, is contradictory to what is stated in the Notice of Appeal. In the material provided on the appeal, there is a handwritten document, purportedly signed by the landlords on 19 February 2020, but received by the Tribunal on 12 March 2020, which states that the notice of the orders made 6 November 2109 was only received by them on 19 February 2020. The letter does not say how they received this notice, or from whom they received it. It is to be noted that this is different to the date on the Notice of Appeal which states 14 February 2020.
4. There may be an explanation for this discrepancy. It may be that the landlords received that material on 19 February, but their agent Raine & Horne, Strathfield received it on 14 February and hence inserted that date on the Notice of Appeal. There is, however, no evidence about this and the Appeal Panel should not be forced to speculate about it. As already observed if the agents did receive notice of the orders on 14 February, the appeal was lodged within time.
5. At the hearing of the appeal, Mr Kim, from Raine & Horne Strathfield who sought and obtained leave to represent the landlords, was asked by the Appeal Panel how his agency had learned of the 6 November decision. He said it was sent to them by express post by the former agents, Creative. When asked when that was, he initially said that it was close to the 6 November hearing date. He then said it was in "November or December". When pressed to explain how it was then that the Notice of Appeal said notice of the orders was received on 14 February 2020, he said his agency must have received that notice on or around that date. Mr Kim was not sworn as a witness but was making submissions on behalf of the landlords.
6. The Appeal Panel is left, therefore, in the position that it the landlords' agent, as their representative on the appeal, has provided different dates on the issue as to when notice of the 6 November orders was received. We were left with the impression that the agent was unsure of when this occurred and finally settled on 14 February working backwards from the date put into the Notice of Appeal. We are not prepared to find on the material before us that the agent first became aware of the 6 November 2019 orders on 14 February 2020.
7. As we have observed with respect to the landlords, the date given by them as to when they became aware of the orders is 19 February. There is no evidence of why the dates on the Notice of Appeal and in the landlords' letter are different. One explanation may be that Raine & Horne, having received the notice of the November orders on 14 February (which as agent of the landlords would constitute notice to them), did nothing until the 19th (five days later) before informing the landlords. There was no evidence as to how or when the information was provided by Raine & Horne to the landlords.
8. If Mr Kim's submissions that his agency was not notified until 14 February 2020 is correct, there is no explanation (as we think there should be) as to why Creative did nothing with the orders when it had received them in early November. The landlord should have put before the Appeal Panel in accordance with directions made, evidence which dealt with the matters necessary to prove when notice of the 6 November orders was received. This was not done.
9. The Tribunal, including the Appeal Panel, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings in accordance with the guiding principle set out in s 36 of the Civil and Administrative Tribunal Act 2013 (CAT Act). Further, the Tribunal (and the Appeal Panel) is not bound by the rules of evidence and can inform itself of any matter in the manner it thinks fit subject to the rules of natural justice (see s 38 CAT Act). In our opinion, however, this does not mean that an appellant to an appeal can expect that the failure to provide evidence of facts relevant to proving important issues that they bear the onus to establish will simply be overlooked by the Appeal Panel. It is not enough in this case to seek to prove matters by submission alone, and in any event, the submissions on this important point were contradictory and could not safely be relied upon.
10. We are therefore not able to be satisfied as to when the appellants (by their agents or themselves) became aware of the 6 November orders. As such, they require an extension of time to appeal.

Extension of time to appeal

1. Despite stating in the Notice of Appeal that they only became aware of the 6 November orders on 14 February 2020 and the appeal itself was lodged on 25 February, the landlords appear to accept they need an extension of time for this appeal as they have noted this in their Notice of Appeal. However, again, they have not provided any evidence in support of discharging their onus to establish that the Appeal Panel should exercise its discretion to extend the time to appeal.
2. The principles governing an extension of time to appeal under s 41 of the CAT act are now well known: see Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 (Jackson) from [18]-[22]. In summary an Appeal Panel will be required to consider: 1. The length of the delay; 2. The reason for the delay; 3. The appellant's prospects of success, that is usually whether the appellant has a fairly arguable case; and 4. The extent of any prejudice to the respondent (to the appeal).
3. As to the length of the delay, as we have explained above, there is no satisfactory evidence as to when or how the landlords (or their agents) became aware of the orders made on 6 November. Those orders were sent by the Tribunal to the email address of the former agent Creative. As far as the Tribunal was aware, that was the relevant address for service. As such, the delay to be considered commences sometime immediately after 6 November 2019. The Notice of Appeal was lodged on 25 February 2020. The length of the delay is therefore approaching three months, which is significant.
4. The Appeal Panel then needs to consider the reason for this significant delay. As explained in some detail above, the appellant has not put before the Appeal Panel any evidence of a sufficient or adequate nature to explain the reason for the delay. That is enough to dispose of the application to extend time to appeal. However, for completeness, we will briefly deal with the other relevant considerations.
5. The third consideration includes: The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case.
6. We are prepared to accept that it is arguable that in there is some prospect of success. That would be on the basis that we accept that the former agent Creative failed to provide a new address for service as directed by the Tribunal on 29 September 2019. We assume here that this was through no fault of the landlords or the new agents, but an omission by Creative. (In saying this we note, once again, there is no evidence put forward by the appellant which would enable such findings to be made - but we assume it for present purposes). As such, it is arguable that through no fault of their own, the landlords did not have an opportunity to present their case to the Tribunal. It is arguable, therefore, that they have been denied procedural fairness.
7. However, as was stated in Jackson: It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59].
8. Given the absence of an adequate explanation for delay in this case, it is necessary to dig deeper into the merits of the appeal, based on the material put before us.
9. The tenants allege they never agreed to have their bond paid in full to the landlord. There is force to this submission. The only material before us from the landlords about the bond was contained in emails between their former agents Creative and the tenants in the fortnight after the tenants vacated. These emails were about the cleanliness of the rental premises upon vacation.
10. In early May 2019 Creative made an offer to the tenants to let the landlords keep the $1760 bond and the remaining $990 the landlords were claiming from them to rectify damage to the premises would not be pursued. There is no evidence the tenants replied to this email. The tenants allege in their application below that they did not respond to this offer and their requests for the outgoing condition report were not answered. It must be remembered the tenants are Thai nationals and English is not their first language.
11. The tenants eventually lodged their application seeking repayment of their bond on 9 September 2019, as the landlords had taken the bond in full on about 11 June 2019.
12. The material before the Tribunal below also indicated that the tenants did not have a copy of their lease, which they had first entered over six years earlier, and the former agent was not providing them with the name of their landlord. The Notice of Hearing for the first appearance was sent to the postal address of Creative, the only agent the tenants had dealt with.
13. The landlords did place before the Appeal Panel material they say they would have relied on below to prove that the damage to the premises was such that the bond would not have been returned to the tenants. An analysis of this material shows that, in reality, the prospects of the landlords' case below were poor.
14. As has been said, the tenants vacated on 17 April 2019 after a six year tenancy. The tenants claimed in their application below and the Reply to Appeal that the landlords commenced renovating the premises in the days prior to them vacating. These submissions appear consistent with the evidence.
15. On 12 March 2020 the Appeal Panel ordered the landlords to lodge with the Tribunal and provide to the Respondents: (a) All evidence provided to the Tribunal below on which it is intended to rely; (b) Any fresh evidence on which it is intended to seek leave to rely; (c) The Appellants [sic] written submissions in support of the appeal; and (d) The sound recording of the hearing at first instance, if what happened at the hearing is being relied on and a typed copy of the relevant parts. … NOTE: … (2) At the hearing the Appeal Panel may proceed, if appropriate, to deal with the appeal by way of a new hearing, under the Civil and Administrative Tribunal Act 2013 (NSW), section 80(3). The parties should be prepared to put before the Appeal Panel any fresh evidence as well as any evidence that was before the Tribunal at first instance and make any submissions in relation to the original application that they want to make.
16. The landlords' evidence on the appeal must therefore be taken to be the entirety of the evidence they would have put to Tribunal below, had they contested those proceedings, as per the directions of the Appeal Panel set out above. The appellants' evidence includes several invoices for work allegedly done to the rental premises. This work does not marry up to the complaints about cleanliness raised by the former agent, nor are they referrable to the outgoing condition report. The emails and report complain of dirtiness and some damage to the kitchen; the invoices are for matters such as replacing entire windows and painting the entire property.
17. The emails of the former agent and the outgoing inspection report do not raise issues with the windows or painting in the rental premises. Yet the landlords provided invoices on this appeal, to prove why they were entitled to the tenants' bond that are for the removal of window frames (on 6 May 2019), the replacement of sliding windows and bathroom windows (on 24 April 2019), the painting of the premises for $4,400 (on 1 July 2017), repair of walls and ceilings (on 10 July 2019) and finally the removal of food and grease in the drainage system plus a clean and degrease of the kitchen on 1 July 2019.
18. In the former agent's emails she attached an invoice for cleaning dated 1 May 2019 for $770 and claimed that amount from the tenants, plus an undisclosed quote for kitchen repairs in the amount of $2,600 plus GST.
19. The prospect of the landlords obtaining an order from the Tribunal that they were entitled to the tenants' bond to, in effect, improve the rental premises some 3 months after the tenants vacated, is very poor. The landlords would have to prove that the damage to the premises after a six year lease went beyond fair wear and tear. The fact that there were up to 10 occupants in the rental premises was the subject of several letters and the cause of several rent increases, according to the evidence filed by the landlords on this appeal. As such, that fact alone would not enable the Tribunal to order the payment of the bond to the landlords.
20. The Tribunal would have to compare the condition of the property at the time of the commencement of the lease to the condition at the commencement of the tenancy, fair wear and tear excepted. The Tribunal would have to consider the submissions and evidence of the parties as to when the landlords commenced renovating the kitchen and how this impacted the landlords' ability to claim compensation from the tenants.
21. Given the dates on the invoices, the description of work done in the invoices, the duplication of the cleaning done on 1 May ($770) with the cleaning done on 1 July ($250), the fact the landlords are only entitled to claim from the bond the reasonable cost of repairs to, or the restoration of, the residential premises as a result of damage (other than fair wear and tear) caused by the tenant, an occupant or an invitee of the tenant, the prospects of the landlords claiming all of the tenants' bond appears to us to be very low. That is, on the material placed before us by the landlords on the appeal, the merits of the case below are very weak. This factor, all other things in the landlords favour, indicates that the discretion to grant the extension of time to appeal would not be exercised as the strict application of the time rules governing the time to appeal would not work an injustice against the landlords (see Jackson, at [22(1)]).
22. As to any prejudice that would be suffered by the tenants if an extension of time was the tenants' vested right in having their bond returned to them creates some prejudice to them. For more than 12 months they have been deprived their bond, which the Tribunal determined was theirs on 6 November 2019. The landlords claimed that bond in full without the tenants' knowledge. They have had to go to the trouble of commencing proceedings and have been successful. This prejudice, albeit not determinative, also speaks against exercising the discretion to extend time to appeal.
23. As was stated in Jackson, at [22(2)] is: The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision - Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success - Jackamarra at [7].
24. In all the circumstances, the Appeal Panel refuses to exercise its discretion to extend time for lodging this appeal to 25 February 2020.
25. Even if we were to find that the appeal was lodged in time and no extension was required, for the reasons above dealing with the prospects of success of the landlords' claim, we would have dismissed the appeal.
26. A stay of the orders made on 6 November 2019 was ordered on 12 March 2020 on the basis that the amount of the bond, namely, $1,760 was paid into the Tribunal pending determination of the appeal. That stay should be lifted and the money held by the Tribunal should be paid to the respondents.

Orders

1. For the above reasons, the orders we make are: 1. Application to extend time to appeal is refused. 2. The appeal is dismissed. 3. The stay ordered 12 March 2020 is lifted. 4. The amount of $1,760 held by the Tribunal should be paid to the respondents.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 20 May 2020