Cossalter v Morgan - [2022] NSWCATAP 136 - NSWCATAP 2022 case summary — Zoe

NSWNSWCATAP

Cossalter v Morgan

[2022] NSWCATAP 136

NCAT Appeal Panel|2022-04-19

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At a glance

Source facts

Court

NCAT Appeal Panel

Decision date

2022-04-19

Catchwords

K George, General Member File Number(s): RT 21/36513
RT 22/00769

Source

Original judgment source is linked above.

Catchwords

K George, General Member File Number(s): RT 21/36513RT 22/00769

Judgment (32 paragraphs)

[1]

Background

In matter RT 21/36513, the Tenant sought orders that a rent increase of 17 September 2021 was excessive (Residential Tenancies Act 2010 (NSW) (RTA), s 44(1)(a)) and an order that the rent payable was excessive due to the reduction or withdrawal of goods, services or facilities provided with the residential premises (RTA, s 44(1)(b)).
In relation to the claim pursuant to s 44(1)(a) of the RTA, the Tribunal held (in summary) at [3]: The tenant also sought orders under s 44(1)(a) of the Act that a rent increase under an existing tenancy agreement is excessive, and that, from a specified day, the rent for the residential premises must not exceed a specified sum. That order was sought in respect of a rent increase notified to them on 13 July 2021, for rent payable from 17 September 2021. The rent was increased from $1400 per week to $1725 per week. As reasoned below, that application was lodged out of time and the Tribunal declined to allow an extension of time. Accordingly, this part of the application is dismissed.
In relation to the claim pursuant to s 44(1)(b) of the RTA, the Tenant made various claims, which are set out in the lengthy and detailed reasons for decision, in relation to habitability of the premises, neighbouring construction works, and specific defects including painting of the premises, the boundary fence, cracks in the walls, loose kitchen tiles, plumbing issues, electrical issues and the balcony doors. The Tribunal concluded at [43]: In relation to the claims made overall in respect of s44(1)(b) and s187(1)(d), the Tribunal is satisfied only that compensation of a nominal sum, calculated at $1400, is payable by the landlord to the tenant. That sum is compensation for loss of quiet enjoyment of the premises resulting from disruptions caused by the neighbouring construction work which the Tribunal considers went beyond the general inconvenience anticipated and priced-in to the agreed rent of $1400 per week to 17 September 2021. The balance of the claims are dismissed.

[3]

Landlord's position

In an email to the Appeal Panel dated 11 January 2022, the Landlord states: I am the respondent Vanessa Morgan. I wish to request that the application for appeal be dismissed and the order made on the 14/12/21 stays [sic - stayed] for the following reasons. It is out of time (14 days) the Order was made on the 14/12/21. The applicant is claiming that he does recognize my representative and that he repeatedly asked for a letter of authority are completely false. He has received the letter of authority twice during the last 18 months. He has been in communication with my representative (my brother) for over a year and he represented me at two NCAT hearings file RT 21/36513 and RT 21/39404 Also I have a hearing with NCAT file RT 22/00769 on the 2/2/22 If anyone should have appealed the Order to compensate the tenant in the sum of $1400 for quiet enjoyment it should have been me as I felt that it was unfair as the tenant was already compensated for this by the highly reduction of rent and was told that the reason for this is because of the construction next door. I am extremely confident that orders will be made in my favor if the appeal is granted it would be a waste of NCAT's time as the tenants (Mr and Mrs Cossalter) have been ignoring the 60 day notice of increased rent since it came into effect on the 17/9/21 by paying the old rent. It should be noted that the 60 day notice of increased rent could have been sent to the tenants 2 months earlier (so that the increase would come into effect as soon as the lease expired on the 17/7/21), instead Mr & Mrs Cossalter were given an extra 2 months leeway for the increase to come into effect (on the 17/9/21) so as to let them have ample time to decide whether to stay or to find alternate accommodation. The tenants have been on a periodic lease since the 17/7/21. Prior to leasing the property, the Cossalters were told that the rent (they would be paying) is greatly reduced (even though the property had just been freshly renovated) due to construction of a new dwelling next door and that the rent would be increased to market value when the lease expires.
These matters were repeated, and amplified, in the Landlord's Reply to Appeal filed on 21 January 2022.

[6]

Leave to appeal

Clause 12 of Sch 4 of the NCAT Act provides that, in an appeal from a decision of the Consumer and Commercial Division of the Tribunal, an Appeal Panel may grant leave to appeal only if satisfied that the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel conducted a review of the relevant cases at [65]-[79] and concluded at 84 that: Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) Issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
Even if an appellant establishes that they may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the NCAT Act. An appellant must demonstrate something more than that the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32].

[8]

Did the Tribunal err in finding that the notice of rental increase dated 7 July 2021 (effective 17 September 2021) was a valid notice?

The Tenant argued before us, and before the Tribunal (at least in relation to the Second Decision), that the notice of rental increase was invalid as it had not been given to him by the Landlord or the Landlord's agent. The Tenant says that the Landlord had failed to comply or satisfy s 41(1)(a) of the RTA which provides: 41 Rent increases (1) The rent payable under a residential tenancy agreement may be increased only if - (a) the tenant is given a written notice by the landlord or the landlord's agent specifying the increased rent and the day from which it is payable, … (emphasis added)
The short point was, and it was common ground, that Mr Bando, the Landlord's representative had given the notice of rental increase. As Mr Bando was neither the Landlord or her agent, the Tenants submitted that s 41(1)(a) was not satisfied and the notice of rental increase was invalid.
During the hearing of RT 22/00769, the Tribunal gave oral reasons for rejecting the Tenant's argument. The Tribunal stated: The Tribunal finds that a valid notice of increase was served on the tenant on the 13th July 2021. The Tribunal finds that this complies with s 41 (1)(g) and (b) in the Act in that it was a written notice, it specified the increase of rent and it specified that date the rent was payable. The notice was signed by Simon Bando. Section 41.1a requires that this notice is to be given to the tenant by the landlord or the landlord's agent. Mr Cossalter has disputed today the validity of that notice and disputing that Mr Bando is the landlord's agent within the definition of Section 5 of the Act. Section 5 of the act defines the landlord's agent as a person who acts as the agent of the landlord and who, whether or not the person carries on any other business, carries on business as an agent for the letting of residential premises or the collection of rent payable for any tenancy on residential premises. Mr Cossalter refers to the note which appears underneath that definition to this effect: "A person who acts as such an agent is required to be licensed under the Property and Stock Agent's Act 2002". The Tribunal notes that, although this is a requirement under the Property and Stock Agent's Act, if an agent is not thus licensed under the Property and Stock Agent's Act, that does not mean that that agent is not an agent within the meaning of the definition in Section 5 of the Residential Tenancies Act. Mr Bando gave evidence that he has been acting as the agent, or as he says the representative, of the landlord during the tenancy and provided as evidence a number of emails between him and the tenants whereby he was conducting business on behalf of the landlord in relation to the premises. Mr Cossalter has not disputed that he has been corresponding with Mr Bando to that effect. Therefore the Tribunal finds that the balance of the evidence demonstrates that Mr Bando is the landlord's agent and therefore finds that the notice of increase of rent is valid.
The Tenant submits, correctly, that 3 of the RTA defines "Landlord" as landlord means - (a) the person who grants the right to occupy residential premises under a residential tenancy agreement, or (b) a successor in title to the residential premises whose interest is subject to the interest of the tenant, or (c) a tenant who has granted the right to occupy residential premises to a sub-tenant, and includes a prospective landlord.
The Tenant further submits, again correctly, that "Landlord's Agent as: landlord's agent means a person who acts as the agent of a landlord and who (whether or not the person carries on any other business) carries on business as an agent for - (a) the letting of residential premises, or (b) the collection of rents payable for any tenancy of residential premises. Note - A person who acts as such an agent is required to be licensed under the Property and Stock Agents Act 2002.
As set out in his extensive submissions, the Tenant submits that Mr Bando, the Landlord's brother, who sent the notice of rental increase, was not the Landlord's agent as he was not licensed as such under the under the Property and Stock Agents Act 2002 (NSW). Accordingly, the notice was invalid.
While we may have expressed the matter differently, we consider that the Tribunal reached the correct result. This is because an "agent" is only required to be licensed under the under the Property and Stock Agents Act 2002 (NSW) if they act as the agent of a landlord and carry on business as an agent for letting the residential premises or collecting rents. We do not understand there to be any evidence to that effect. Ms Navone told us that she was in her late 80s, and we understood that she does not carry on the business of being a real estate agent. Similarly, the Tenant appears to accept that Mr Bando was not a licensed agent.
What the Tenant is overlooking is that there is a common law definition of agent, which is simply one person acting for another. One example is where is one person executes a power of attorney in favour of the other. Another is authorising a person to collect your goods from the post office. We consider that, as the Tribunal correctly found, that an agent for the purposes of s 3 of the RTA may be a person other than a person licenced under the Property and Stock Agents Act 2002 (NSW).
In our view, this issue raises a question of law. For the above reasons, this ground of appeal is dismissed.

[9]

Did the Tribunal err in not allowing the appellant an extension of time in which to bring a challenge to that notice?

In relation to this issue the Tribunal stated: 13. Under section 44 of the Act, an application for an order that a rent increase is excessive must be made within 30 days after the notice of the increase is given: s44(2) and reg 39(1). It is not disputed that the notice of increased rent was given by the landlord to the tenant on 13 July 2021. The relevant NCAT application was lodged on 26 August 2021, which is greater than 30 days later. On its face, that application is out of time. 14. The Tenant argued that he was not aware of the applicable time limits; due to a range of factors including lockdowns and COVID-19, business pressures and a belief that the landlord would be reasonable, the tenant tried to work things out with the landlord; if not for lockdown he intended to vacate before the rent increase came into effect; his son is doing the HSC; he felt forced to make the NCAT application as he did not want to move due to health orders related to COVID-19. 15. The landlord argued that the tenant had more than enough time to decide whether to vacate or to lodge an NCAT application regarding the rent increase within time; the information in the tenancy agreement makes it clear when he would need to apply to NCAT regarding a rent increase and other matters. 16. Noting that time limits for lodgement of an NCAT application should generally be observed, with a discretion to allow late applications where justice may require, I am not satisfied that the evidence provides sufficient justification for allowing any extension of time to allow the tenant to challenge the rent increase notified to him on 13 July 2021. Accordingly, that portion of the application is dismissed.
The first matter to note is that the refusal of the Tribunal to extend the time for the doing of is an interlocutory decision (NCAT Act, s 3) and appeals may only be made with the leave of the Appeal Panel (NCAT Act, s 80(2)(a)).
In Champion Homes Pty Ltd v Guirgis [2018] NSWCATAP 54 the Appeal Panel set out the principles relevant to a grant of leave to appeal an interlocutory decision as follows: 35 As stated in various decisions of the Tribunal and its predecessor, the Administrative Decisions Tribunal, the principles to be applied are to be derived from the principles applicable to leave applications in courts: see for instance, Johnston v Department of Education and Training (GD) [2007] NSWADTAP 6 and BHM v BHN & Ors [2014] NSWCATAP 26. These principles include the following: (1) It is unnecessary and unwise to lay down rigid rules of practice or exhaustive criteria governing the grant of leave to appeal: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 175; [1981] HCA 39; (2) However, the requirement for leave is a filter restricting access to the appeal process: Coulter v R (1988) 164 CLR 350; [1988] HCA 3 at 359 per Deane and Gaudron JJ; (3) Leave should only be granted where there are substantial reasons to allow an appellate review: Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] 104 FCR 564; (4) Circumstances justifying leave may be an error of principle resulting in substantial injustice: Minogue v Williams [2000] FCA 125. However, these concepts may not be cumulative; (5) There is a difference between the exercise of a discretion concerning a matter of practice and procedure and an exercise of a discretion that determines substantive rights: Adam P Brown per Aickin, Wilson and Brennan JJ at 177 citing with approval Jordan CJ in In re Will of FB Gilbert (dec) (1946) 46 SR (NSW) 318 at 323; (6) Where an interlocutory decision effectively determines the substantive rights of the parties, that may be a significant factor in favour of granting leave to appeal: Eltran Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 195 per Spender J at [14]-[15], referring to Ex parte Bucknell (1936) 56 CLR 221 at 225-6; (7) In connection with a matter of practice and procedure, restraint be applied in reviewing such decisions, especially if an application for leave is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21], referring to Adam P Brown and in In re Will of FB Gilbert (dec); (8) Leave should not be granted unless a substantial injustice would result and the decision is attended with sufficient doubt to warrant it being reconsidered by the appeal body. What is sufficient is dependent on the particular case: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 398-9; (9) Lastly, subject to the above, the matters set out in Collins at [84 (1)-(2)] are also relevant to the exercise of a discretion to grant leave.
The Appeal Panel's reference to "Collins" is a reference to Collins v Urban part of which we have set out above.
The Tenant says that the decision of the Tribunal not to extend the time for the making of this claim was not fair and reasonable as:

the application was filed only 13 days "after the cut off";
the Tribunal failed to consider the effects of COVID resulting in, amongst other matters, it being to "difficult to access information let alone advice";
the parties were in negotiations;
the Tribunal failed to consider the Landlord's reluctance to even contact the relevant tradespeople, with the result that the Tenant's son was without a light in his bedroom for three months while studying for the Higher School Certificate.

We have set out the Tribunal's reasons for refusing to extend time above. We see no error in the Tribunal's reasoning and would not grant leave to appeal on this ground. The Tribunal identified the appropriate legislative provisions and exercised its discretion judicially and appropriately. And, as the Appeal Panel has noted in various decisions, the rules of court must prima facie be obeyed. In Jackson the Appeal Panel referred with approval to the decision of McHugh J sitting as a single justice of the High Court in Gallo v Dawson [1990] HCA 30, 93 ALR 479 who stated at [2]: The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court or Justice to do justice between the parties:
The Appeal Panel also reproduced a further statement of McHugh J that: As the Judicial Committee of the Privy Council pointed out in Ratnam v. Cumarasamy (1965) 1 WLR 8, at p 12; (1964) 3 All ER 933, at p 935: The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.
At [21] the Appeal Panel stated: Time limits, including the specification of the time within which an appeal from an internally appealable decision to the Appeal Panel of the Tribunal must be lodged, are established by legislation for the purpose of promoting the orderly and efficient conduct of proceedings in the Tribunal, providing certainty for the parties to proceedings, especially the party in whose favour orders have been made, and achieving finality in litigation. For these reasons, these time limits should generally be strictly enforced. That is not to say, however, that exceptions should not be made where the interests of justice so require. The express power in s 41 of the Act to grant extensions of time allows the Tribunal to prevent the rigid enforcement of time limits becoming an instrument of injustice. …
As noted, this ground of appeal seeks to appeal an interlocutory decision of the Tribunal. For the above reasons, we would not grant leave to appeal this matter, and otherwise dismiss this aspect of the appeal.

[10]

Did the Tribunal err in finding that the "rent was discounted at the commencement of the tenancy in recognition of convenience caused by neighbouring construction work"?

There was a live issue both before the Tribunal and the Appeal Panel whether the rent for the premises was "discounted" at the commencement of the residential tenancy agreement because of the construction works next door.
The Tribunal found (at [10]) that there was a residential tenancy agreement entered into between the parties on 7 July 2020. The Tribunal found that the term of the residential tenancy agreement was 12 months commencing on 18 July 2020 and ending on 17 July 2021, after which it continued as a periodic agreement.
We note that the rent provided for in the residential tenancy agreement was $6,083.33 per month, but was referred to repeatedly in the evidence and at the hearings as $1,400 per week. Based on a monthly rent of $6,083.33 the weekly rent was actually $1,403.85, but nothing turns on this.
It is common ground that there were construction works taking place next door, and an additional term of the residential tenancy agreement records that "The Tenant has been advised that there is construction next door".
The Tenant submits that he never agreed to any rental "reduction", and further submitted to both the Tribunal and the Appeal Panel that the rent for the previous tenants was $1,400 per week, and accordingly there was no reduction.
On the other hand, the Landlord submitted to the Appeal Panel that the Tenant was told, "as were all the others", that the rent was reduced to below market value "due to construction next door even though it has just been renovated", and that he "again was told when trying to negotiate the rent that it was a reduced because of next door's construction [-] it is also written in the special conditions form he signed".
The Landlord submitted at the Tribunal hearing that there was in fact a reduction by reason of the Landlord having undertaken $70,000 of renovations to bring the property up to a "different level".
The Tribunal dealt with these matters at [26] of the Decision stating: 26. Relevant to the claims made, the landlord argues that the rent was discounted at the commencement of the tenancy in recognition of inconvenience caused by neighbouring construction work. The tenant's documentation includes correspondence with the landlord where this is referred to, lending support to the landlord's claim that this inconvenience has already been compensated within the rent price applied until 17 September 2021. The landlord claims this discount was discussed verbally and not put in writing. The tenant argues that a discount of rent was never applied. He relies on a rental ad for the same premises, dated July 2019 (p140 of the tenant's docs), in which the rent sought is $1,400, which is what he was required to pay from the commencement of the tenancy until 17 September 2021. The landlord argues that since that 2019 ad was placed, some $70,000 worth of renovations have been undertaken at the premises which increased its market value; notwithstanding those improvements, the rent remained at $1400 in recognition of the inconvenience from neighbouring construction works. The tenant concedes that some improvements occurred. The Tribunal accepts the landlord's arguments that the rent applied from commencement of the tenancy until 17 September 2021 included a discount for general inconvenience arising from neighbouring construction work.
We think the Tribunal erred in coming to this conclusion. We do not consider that the uncorroborated assertion of the Landlord's brother that $70,000 worth of renovations would necessarily result in a property being rented at a higher amount, which the Landlord then decided to discount, at least not without some independent evidence on the issue from a real estate agent or valuer. It may be, but we do not know, that the condition of the property was such that those renovations only brought it up to a "level" where it could be rented at $1,400 per week (or equivalent).
In our view, the Tenant may have suffered a substantial injustice by the Tribunal's treatment of this issue, and leave to appeal should be granted.

[11]

Did the Tribunal err in its approach to finding what if any amount should be awarded to the appellant by way of a rental reduction?

The Tenant argues, with some justification, that the conclusion that there was a rental "discount" at the commencement of the tenancy until 17 September 2021 "included a discount for general inconvenience arising from neighbouring construction work" and that this affected the Tribunal's assessment of his claims under s 44(1)(b) of the RTA.
This can be seen in the following passages of the First Decision. At [27] the Tribunal relevantly stated: On the evidence before it the Tribunal cannot be satisfied that the general inconvenience arising from the neighbouring construction works extended beyond 17 September 2021 (the date the rent increase applied from) and considers that a rent reduction and compensation arising from general inconvenience from the neighbouring construction works has already been applied to the rent payable by the tenant from commencement of the tenancy to 17 September 2021. However, as reasoned below, the Tribunal considers some aspects of the neighbouring construction works went beyond general inconvenience, for which an award of compensation to the tenant is appropriate.
At [30] the Tribunal stated: As reasoned above, the Tribunal accepts the landlord's arguments that the rent applied from commencement of the tenancy until 17 September 2021 included a discount for general inconvenience arising from neighbouring construction work. Accordingly, the Tribunal considers that that inconvenience had already been compensated and cannot be compensated again. However, the Tribunal considers, for reasons given below, that some of the adverse impacts to the tenant arising from the neighbouring construction works went beyond the general inconvenience anticipated by the discounted rent. Those inconveniences relate to specific intrusions at the premises by neighbouring builders for the purposes of erecting fencing, landscaping, inspecting internal wall cracks resulting from neighbouring demolition work, and attending to the footings of the premises. Those additional inconveniences, in the Tribunal's view, resulted in compensable losses of quiet enjoyment of the premises for the tenant. As the duration and extent of the intrusions are not clearly ascertainable on the evidence advanced, the Tribunal considers the payment of a total nominal sum of $1400 (equivalent to one week's rent) from the landlord to the tenant appropriate compensation for those losses. For the reasons set out below, the balance of the claims are dismissed.
And at [43] the Tribunal concludes: In relation to the claims made overall in respect of s44(1)(b) and s187(1)(d), the Tribunal is satisfied only that compensation of a nominal sum, calculated at $1400, is payable by the landlord to the tenant. That sum is compensation for loss of quiet enjoyment of the premises resulting from disruptions caused by the neighbouring construction work which the Tribunal considers went beyond the general inconvenience anticipated and priced-in to the agreed rent of $1400 per week to 17 September 2021. The balance of the claims are dismissed.
We find that final statement to be inconsistent the first order made by the Tribunal in the First Decision, which was that the Landlord pay the Tenant $1,400. There is to that order a notation which states: Reasons: for loss of quiet enjoyment resulting from specific intrusions related to constructing a boundary fence, landscaping, attending to footings and inspecting internal cracks (detailed reasons set out below) - $1,400.00

[12]

What orders should the Appeal Panel make?

This relationship between the parties (or at least between the Tenant and the Landlord's representatives) is dysfunctional if not acrimonious. This was evident at the appeal hearing, and apparent when we listened to the sound recording of the hearings before the Tribunal. This was borne out in the documents provided by the parties, and exacerbated by both sides accusing the other of perjury.
Section 81 of the NCAT provides: 81 Determination of internal appeals (1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following - (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.
We have already indicated that we see merit in some aspects of the Tenant's appeal in relation to the issue of compensation. Rather than remit the appeal to the Tribunal for further redetermination, as we have all of the evidence of the Tenant relied on below, and have access to the materials filed in the Tribunal by the Landlord, and have the sound re cording of the hearing together with a partial transcript, we think it in the best interests of all concerned, and consistent with the guiding principle of the Tribunal, namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings (NCAT Act, s 36) to exercise the powers given to us under s 81(2) of the NCAT Act.
In this respect, we note that in a recent decision of the Appeal Panel Nunez v Sampson [2022] NSWCATAP 125 the Panel relevantly stated at [67] to [72]: 67. The only appealable error we have identified is an error due to inadequate reasons concerning the assessment of compensation. That error requires that the existing orders for compensation be set aside and the amount of compensation be reassessed. … 70. In such circumstances, where the amount of compensation remains the only unresolved issue between the parties, and where it seems to us that we are in as good a position as the Tribunal at first instance to assess the level of compensation to be awarded, we consider that we should proceed to conduct such an assessment for ourselves doing the best we can on the somewhat limited information presented by the parties, rather than remit the question to the Tribunal for redetermination. That approach is consistent with the guiding principle in s 36(1) of the NCAT Act. 71. In this regard we have been provided with the material that the respondent relied upon at first instance in support of his claim for compensation, we have the transcript of the hearing at first instance and we have the material that both parties presented on appeal. It is notable that neither at the hearing at first instance nor in the material which the landlord had the opportunity to present on appeal did the landlord present any specific contentions about the quantum of compensation other than to deny that any compensation should be awarded and to say that the order for $800 per week in respect of the lack of ventilation was excessive or unreasonable. 72. We consider that it is appropriate to assess quantum by determining a notional rent reduction referable to the relevant breaches. This accords with the approach accepted by the Tribunal at first instance (not challenged on the appeal in that case) in Bhandari v Laming [2015] NSWCATAP 224 (see at [16]) in which compensation in respect of smoke infiltration of residential premises was quantified by the Tribunal as a percentage of the rent for the period that such inconvenience and discomfort was experienced. 73. This also accords with the guidance provided by the English Court of Appeal in English Churches Housing Group v Shine [2004] EWCA Civ 434 ("English Churches"), referred to in Anforth, Christensen & Adkins, [Residential Tenancies Law and Practice New South Wales (7th ed, 2017)] at 2.187.7. …

[13]

Habitability

The First Decision records: 28. The tenant claims the entire downstairs area of the premises as a ceiling height of less than 2.2 metres and should be considered uninhabitable. There is no evidence from a building certifier or relevant expert. The tenant relies on photos depicting a person holding a tape measure showing 2 different measurements for the ceiling height. Those measurements appear to be 2m20cm and 2.67metres. The tenant also relies on an article from domain.com.au dated in August 2016, some 4 years prior to the tenancy commencing. That article makes reference to the Building Code of Australia determining what constitutes a habitable room and makes repeated mention of the code changing often. No documentation has been submitted regarding the building code relevant to the time of the tenancy. Also relevant, the Act has specific provisions addressing habitability of a residential premises. Section 52 of the Act sets out a landlord's obligation to provide a premises which is fit for habitation by the tenant. Section 52(1A) and (1B) go on to set out, without limitation, circumstances in which a premises may generally be considered unfit for habitation. Ceiling height is not listed. 29. Also relevant, the tenant's evidence is that the occupants of the house (ie the tenant, his wife and children aged 15 and 18) generally require 3 bedrooms; the bedrooms they occupy are on the upper storey of the house, not the lower floor with the lower ceiling height; ideally they would have an additional bedroom for guests. The tenant claims that the premises should not be marketed as a 5-bedroom house when 2 of the bedrooms are not habitable as bedrooms, and when the entire bottom floor can only be used as storage space. The Tribunal has before it insufficient evidence of the floor plan or of the ceiling heights and/or condition of the rooms which the tenant claims are uninhabitable. The Tribunal considers the evidence before it insufficient to establish, on the balance of probabilities, that the any portion of the house was uninhabitable.
The Tenant submits that he did not supply the evidence referred to in those paragraphs to support a claim for compensation. Rather he says that the evidence was supplied "in order to establish comparable properties for the purpose of a market comparison". He says that he was "simply pointing out the fact that the downstairs area of the house containing what the Landlord claims to be a bedroom has ceiling heights of less than 2.4m which is the requirement under Section 3.8.2.2(a) of the National Construction Code for a bedroom to be deemed habitable".
In any event, at the appeal hearing the Tenant confirmed that he was not seeking any reduction in rent in relation to this issue.

[15]

Painting

The Tribunal's findings on this matter were set out at [33] as follows: The tenant argues that, during the tenancy, the landlord arranged for spray painting at the premises; this resulted in paint residue being left on the balcony, his barbeque and some windows. He was unsure how many windows had paint on them and submitted no photos of the impacted windows. He described "some windows" having paint splatters on them. His documents included photos which showed paint on a small portable BBQ and on the balcony floor. He said he found the paint marks "embarrassing" due to the poor aesthetics it created; he ended up throwing out the BBQ. When asked why he threw it out rather than trying to remove the paint he said he did not ask for it to be painted and decided to throw it out. Regarding the balcony, the only reduction in use identified was that the tenant felt disinclined to use it for entertainment due to the poor aesthetics. The Tribunal is satisfied that there were some paint marks on the balcony and barbeque, but is not satisfied that the paint marks on the barbeque require it to be thrown out. In relation to the paint more generally, the evidence advanced does not allow the Tribunal to ascertain the extent of the paint marks except on a small area identified as the balcony floor. On the evidence advanced the Tribunal is not satisfied, to the civil standard, that the paint marks amounted to a reduction or withdrawal by the landlord of the balcony area, or that any compensable loss is established. This portion of the claim is dismissed.
The Tenant submitted that the painter was engaged by the Landlord and had nothing to do with works being conducted by the neighbour. As such, he submits that it was not fair or equitable to attribute any compensation for damages or reduction of services to a rental reduction, the Landlord claims to be as compensation for acts of the neighbour. He says that the Tribunal's finding that there was damage caused to the Tenant's property by the painter and that there was a reduction in services but provides no compensation which does not seem fair or equitable.
We do not consider that the Tribunal mischaracterised the claim in any way. We agree with the Tribunal's conclusion not to allow any rent reduction in relation to this matter.

[16]

Boundary fence

The Tribunal's findings on this matter were set out at [34] and [35] as follows: 34. The tenant argues that the landlord had made a promise, at the commencement of the lease, that the boundary fence would be replaced in a "few months", but this did not happen until around 2 or 3 months ago. The tenant was not certain of the date when the fencing work was ultimately completed, nor about the timeframe in which the landlord had initially indicated a new fence would be erected. He said it took the builders around 2 weeks to complete the fencing work and landscaping; his family had to put up with tradespeople at the premises during that time and had to endure a broken fence which was replaced by scaffold fencing until it was replaced 2 or 3 months ago. He said again that he felt embarrassed by the poor aesthetics of the fence until it was replaced. 35. The landlord argued that the fence had been removed by the neighbour's builders; this had been anticipated and accommodated in the reduced rental of $1400 per week the tenant was paying until the rent increase came into effect on 17 September 2021; the neighbour's builder was responsible for the replacement of the fence, the landscaping and the timing of those things; the landlord had no control over the timing of those works; the landlord was often not notified when tradespersons were attending the premises so could not notify the tenant; he does not believe the fencing work took 2 weeks to complete, and believes that at most, this would have only taken a few days. The parties disagreed about how long those works took to complete and when they were completed. While the duration of the fencing work is not ascertainable on the evidence, the Tribunal is satisfied that the evidence establishes, to the civil standard, that specific intrusions into the tenant's quiet enjoyment of the premises took place for a period of time during which the fencing work was being undertaken. The Tribunal is satisfied that a nominal sum of compensation is justified for this.
The Tenant submitted that: The construction of the fence was the subject of a dispute between the neighbour and the landlord which was ultimately resolved by the Tribunal. It is my understanding that the Tribunal found that both parties were mutually and equally responsible for the reconstruction of the fence. As such we view this disruption as a result of the landlord's actions and not the neighbour. This would then not be included in any rent reduction agreement should there have been one. Notwithstanding this, the landlord claims a rental increase was to come into effect on the 17th September 2021. The [Tenant] seeks leave to introduce the timestamped image (page 262 and below) which shows the fence still to be constructed in a photo taken on the 21st September 2021. The [Landlord] claimed that this fence was completed months prior to the rental increase (36:40-37:10). Whilst the image was available prior to the deadlines, it could not have been foreseen by the Applicant that the [Landlord] would misrepresent the date of completion. Not allowing its introduction would allow false evidence to be taken into consideration which is neither fair nor equitable. The Tribunal agrees that the intrusions were compensable but only to a nominal sum due to the "rent reduction". By this point , though, the "rent reduction" had been deemed to be over. As such it would only be fair and reasonable to order a fair and reasonable amount of compensation rather than a nominal sum which took into account a rent reduction which no longer existed.
As to the fresh evidence sought to be relied on, we are not satisfied that the photograph sought to be relied on falls into that category of material that is appropriate to allow into evidence on appeal when it was not relied on at the first instance hearing, that is that the documents were not reasonably available. The test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [23]; see too Elsayed v Tassone [2022] NSWCATAP 69 at [18].
The Tribunal allowed a nominal sum for this item, which was wrapped up in the award of $1,400. We propose to allow $10 per week for a period of 16 weeks in relation to this issue, that is $160.

[17]

Cracks in walls

Again, the Tribunal allowed a nominal sum for this item, which was wrapped up in the award of $1,400.
The Tribunal's findings on this matter were set out at [36] as follows: 36. The tenant argues that there is extensive cracking in the internal walls of the premises which became increasingly evidence during the tenancy. He said the impact was largely aesthetic. He relied on photos at pp97 to 116 of his documentation. He added that he had to endure multiple inspections of the cracking from tradespeople/builders and the landlord, some of which he was not notified of ahead of time. He estimated around 12 visits from a range of people to inspect the cracks inside the premises; some of those visits were short, and some lasted several days (eg, when builders attended to work on the footings of the premises). The landlord disagrees that there were 12 visits. He argues that construction work next door included demolition which seems to have resulted in cracks inside the premises; the builder from next door came to the premises to inspect the cracking and there was a dispute with the next door builder in respect of damage from the demolition works; the landlord has attempted to arrange to have the cracks attended to, but the date was not suitable for the tenant and now cannot be done until the new year. The Tribunal considers the evidence overall to establish, to the civil standard, that the cracking in the internal walls resulted in multiple visits to the premises by the landlord and relevant tradespeople. The exact number of visits cannot be ascertained on the evidence. However, the Tribunal considers it appropriate that a nominal sum be awarded to the tenant as compensation for the loss of quiet enjoyment resulting from those specific intrusions.
In support of this aspect of his appeal, the Tenant seeks to submit into evidence three categories of fresh evidence.
The first category are recent photographs of the cracks in the walls under repair. The Tenant says that these images show that the cracks have been in existence for a very long time, "since empirical times". He says the photographs were only reasonably attainable once the Landlord's builder revealed the true extent of the damage.
The second category are images of the current state of the cracks which exist "to this day". These images "should [sic? - show?] that we have had to live under these reduced conditions long after the "rent reduction" had expired. These were not reasonably attainable at the time as they prove current state of the premises for which we are now potentially being required to pay 23% higher rent and potentially for the last 5 months".
The third category consists of two independent engineers' reports produced: prior to the commencement of my lease (pages 177-231). One is from just before the lease was executed and one was from 12 months prior. These show that the cracks existed prior to any construction commencing on the house next door. As such these cracks, and their restoration, are not the result of construction next door and therefore any compensation should not be considered in light of a "rent reduction" for the inconvenience of works by the neighbour. The [Tenant] seeks leave to introduce this evidence as the existence of the reports was not evident to the [Tenant] until after the cut off dates for evidence and contradicts sworn testimony of the [Landlord]. Not allowing them to be entered into evidence would result in a miscarriage of justice based on false testimony.
In our view none of this material should be admitted on the appeal. The engineers' reports were clearly available at the time of the hearing, and we see no reasons why the documents the subject of the first two categories was not objectively reasonably available at the time of the hearing.
In other submissions on this item, the Tenant appears to be suggesting that the reasons given by the Tribunal for not awarding were inadequate. This matter does raise a question of law: see Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at 13 and the authorities there referred to.
As the Tribunal noted in Carbery v Warringah Rugby Club Ltd [2021] NSWCATAP 153, in NSW Land and Housing Corporation v Orr [2019] NSWCA 231, Bell P (as the Chief Justice then was) with whom Ward JA (as the President was then) agreed, stated at [66]: In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] (Resource Pacific). The standard is not one of perfection: Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255 …
We consider that the Tribunal conformed with the expectation to provide reasons that surpassed the minimum acceptable standard. The structure of the Decision was entirely orthodox, and the member set out the relevant principles to be applied and made relevant findings of fact, albeit briefly. In our view, the reasons sufficiently dealt with each, including then issue of whether there should be a rent reduction on account of the cracks in the walls.
Regardless of that, in re-exercising the Tribunal's discretion, we are not persuaded that the rent should have been reduced on account of the cracks in the walls.

[19]

Plumbing issues

The Tribunal's findings on this matter were set out at [38] to [40] as follows: 38. Multiple plumbing issues are raised by the tenant. He claims there is a foul odour coming from the downstairs bathroom, that the upstairs shower is not draining properly, with water pooling in the shower and on the bathroom floor, there is a leak in the laundry, and the hot water system produces scolding hot water. He submitted photos which show pooling or dripping water. He claims these issues were evident early in the tenancy, but that he first notified the landlord in writing of each item on 19 August 2021 (p68 of his evidence). He did not explain why he did not raise them earlier if they were evident to him earlier, offering only that the landlord had told the tenants they were too demanding, so they stopped raising issues. 39. In the email of 19 August 2021 the tenant refers briefly to these issues. The only specific reference to the shower is that the "bathroom plumbing is backing up". He also refers to "an ungodly stench emanating from the downstairs bathroom, hot water temperature is not moderated" and "there is a leaking pipe in the laundry". He told the Tribunal that, most recently, the upstairs shower could not be used for 4 months as he was concerned that using it may be causing other issues, including a leak in the downstairs laundry. Regarding the hot water system, he said that the hot water is extremely hot and could pose a risk to young children using the taps. He said he arranged for a plumber to attend to look at the blocked shower drain; the plumber came out and fixed something, which seemed to work, but the problem has now emerged again. He did not produce any invoice or report from the plumber but said it is on his desk. He was uncertain as to the date the plumber attended. When asked whether he asked his plumber to look at the leak in the laundry and/or the cause of the odour in the downstairs bathroom and/or the hot water issues, he said he did not. 40. The Landlord argued that the first time the tenant notified of any plumbing/hot water issues in August 2021, shortly after being issued with a notice of rent increase; the landlord acted with due diligence in responding to these issues; the landlord first suggested the tenant tries Draino or a similar product to unblock the drains (in the event that there was hair or other dissolvable items blocking the drains due to regular use) and to let the landlord know if the issue persists; there was no follow up from the tenant identifying any continuation of the plumbing problems following the email of 19 August 2021; the tenant has provided no evidence that he ever engaged a plumber, nor any probative evidence of any actual defect or fault with the plumbing. Considering the evidence overall in respect of the leaking laundry pipe, the pooling of water in the shower and the odour in the downstairs bathroom, the Tribunal is not satisfied that the evidence establishes, to the civil standard, any breach or failure by the landlord to act with due diligence in responding to those matters, nor any compensable loss. Nor does the evidence establish, to the civil standard, that a rent reduction is warranted in respect of this item as the evidence fails to establish, to the civil standard, that there has been any reduction or withdrawal of any goods, services or facilities at the premises attributable to any act or omission by the landlord in respect of these items.
The Tenant rejects the finding that the Landlord acted with due diligence in relation to this issue. He says that the Landlord never attended the premises to inspect issues, other than the cracks in the walls. Rhetorically he asks, "Why did they not check on the other issues with a visit"?
We think that the Tribunal's decision was against the weight of the evidence, and that the Tenant is entitled to some rental reduction. We propose to allow $10 per week for a period of 16 weeks in relation to this issue, that is $160.

[20]

Electrical issues

The Tribunal's findings on this matter were set out at [41] as follows: The tenant has raised issues with the hallway lights, and the lights in one bedroom. He claims that the hallway lights have been faulty since one month after the tenancy commenced. He claims that they did not work at all from that time, so he used lamps for there instead. He claims also that the light in his son's bedroom did not work for 3 months. He says he first notified the landlord of these issues in his email of 19 August 2021; the landlord has since sent an electrician to inspect and the lights are now working. The landlord said that, on being first notified of these issues in August 2021, the landlord asked the tenant to change the lightbulbs to see if that fixed the problems, and asked him to contact them again if it did not; the landlord did not want to pay an electrician a call-out fee if it was a matter of light bulbs needing changing; when the tenant informed the landlord that changing the lightbulbs did not fix the situation, the landlord promptly sent an electrician to attend to the situation; the electrician attended in around October 2021. The landlord argues that he acted reasonably and promptly in responding to the complaint. Considering the evidence overall in respect of the hallway and bedroom lights, while the Tribunal accepts that there was a period in which those lights did not work, the evidence advanced does not establish, to the civil standard, any fault or breach by the landlord in responding to those concerns. Accordingly, the evidence fails to establish, to the civil standard, that compensation or any rent reduction is warranted for those items.
In his submissions, the Tenant acknowledged that he only informed the Landlord of the electrical faults on 19 August 2021 and that he tried to change the light bulbs. He notes that the Tribunal finds at [41] that the electrician finally attended in October. The Tenant submits that emergency electrical repairs were an essential service and individuals who provided this service were not subject to the COVID lockdown rules. He submits that two months to get emergency electrical works done especially in the room of a child who has been forced to home school and is studying for his HSC is not reasonable. He submits that it is not fair or equitable that a tenant should have to pay full rent for rooms that do not have operable lighting or plumbing and which the Landlord refuses to or delays repairs.
The Tenant is disputing the factual findings and the conclusion of the Tribunal. We propose to allow $5 per week for a period of 16 weeks in relation to this issue, that is $80.

[21]

Balcony doors

The Tribunal's findings on this matter were set out at [42] as follows: 42. The tenant argues that the balcony doors, which open onto the TV room, have a small gap which exposes that room to outside elements. He relied on photos at p125-129 of his documents. Those photos depict a small gap between the balcony doors adjoining a TV room. The evidence of the parties indicates that the tenant first notified the landlord of this concern in his email of 19 August 2021. The landlord argues that a similar issue was raised earlier in the tenancy; the landlord arranged to have that issue remedied to the tenant's satisfaction; this issue was not raised again until the tenant's email of 19 August 2021; this was during lockdown which has impacted the landlord's ability to have a handyperson attend to inspect; lockdown ended in close proximity to Christmas which has meant that an inspection cannot occur until the new year. The Tribunal is not satisfied that the evidence establishes, to the civil standard, any breach by the landlord in responding to the tenant's concerns regarding the balcony doors, nor any compensable loss to the tenant. Nor does the evidence establish, to the civil standard, that a rent reduction is warranted in respect of this item as the evidence fails to establish, to the civil standard, that there has been any reduction or withdrawal of any goods, services or facilities at the premises attributable to any act or omission by the landlord.
The Tenant submitted that he provided evidence of issues with the doors beginning from the onset of the residential tenancy agreement, which were recorded in the condition report. He says that this issue provided significant discomfort with respect to access to the property and then in terms "of temperature controlling the house". He does not see it as fair nor reasonable for the Landlord to refuse to repair "fundamental rights such as shelter from the elements" and that they are allowed "to get away with it when they refuse to do anything about it".
We see nothing of substance in this ground of appeal.

[29]

            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

Parties

Applicant/Plaintiff:

Cossalter

Respondent/Defendant:

Morgan

Legislation Cited (5)

ative Tribunal Act 2013 (NSW) - ss 3, 80; cl 12 of Sch 4 Civil and Administrative Tribunal Rules 2014 (NSW) - rr 3, 25(4)(b)) Residential Tenancies Act 2010(NSW)

(Residential Tenancies Act 2010(NSW)

Civil and Administrative Tribunal Act 2013(NSW)

Civil and Administrative Tribunal Rules 2014(NSW)

Property and Stock Agents Act 2002(NSW)

Cases Cited (28)

Preliminary - extension of time

We note that the Second Appeal may not have been filed in time.
In residential proceedings (defined in r 3 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules)), notices of appeal must be filed within 14 days of the relevant decision: (NCAT Rules, r 25(4)(b)).
The Second Decision was published to the parties on 2 February 2022. As the notice of appeal was filed on 18 February 2022, the notice of appeal appears not to have been filed in time. However, the Tenant says that he did not receive the decision until 7 February 2022, in which case he had until 21 February 2022 to file the notice of appeal and therefore it was filed in time.
The principles governing extensions of time are well-established and were considered in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 and confirmed in Di Salvo v Leung [2014] NSWCATAP 44. In summary, the considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a notice of appeal are the length of the delay; the reason for the delay; the extent of any prejudice suffered by the respondent; and the appellant's prospects of success.
As the parties are in agreement that there was an error in the calculation of the rental arrears set out in order (6) of the Second Decision, it is appropriate, if necessary, to extend the time for filing the notice of appeal to 18 February 2022.

[1990] HCA 30

(1981) 148 CLR 170

(1988) 164 CLR 350

(1991) 32 FCR 195

(1936) 56 CLR 221

(1991) 33 FCR 397

(1982) 40 ALR 233