Davies-Evans v MacCulloch

Background

1. The tenant moved into residential premises owned by the landlord in 2008. In about 2014, the tenant told the landlord's agent that there was mould in the bathroom and in one of the bedrooms and that the bedroom smelt damp. The tenant raised the issue of dampness and mould with the agent again in 2015. The tenant had further communications with the landlord's agent in 2016 and 2017 about the damp and mould.
2. The tenant brought proceedings in the Tribunal in 2017, during her tenancy, seeking, relevantly, a rent reduction of $13,780.
3. The tenant's case at the hearing was that there had been a withdrawal of goods, services and facilities in the premises due to the presence of mould, including by affecting the habitability of the premises and the air quality in the premises. She said that she was unable to use two bedrooms as a result of the mould and had to sleep in the living room.
4. Section 44(1)(b) of the Residential Tenancies Act 2010 (NSW) ("RT Act") provides: "(1) Excessive rent orders The Tribunal may, on the application of a tenant, make any of the following orders: … (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."
5. The Tribunal dealt with the tenant's claim for rent reduction as follows: "I accept that the property had some level of mould. However the question for the tribunal is whether it is the landlord's fault. The question therefore to be determined in respect of this claim, is whether the landlord is liable to the tenant."
6. The Tribunal referred to the tenant's claim that the mould "was possibly due to the landlord not fixing a leak in the roof." It identified the issue for determination as being "whether the mould is caused by a leak in the roof or any other structural defect." The Tribunal concluded that the tenant had not established that the mould was caused by a leak in the roof or by any structural defect which the landlord had failed to address. The Tribunal also found that the tenant had not established that she did not use the bedrooms in the premises due to the presence of mould. Accordingly, it dismissed her application for an order under s 44(1) of the RT Act.

Grounds of Appeal

1. The tenant identified four grounds of appeal in her notice of appeal, but at the hearing she only pressed the first two. These were: 1. The Tribunal erred in law by applying the wrong test under s 44 of the RT Act; and 2. The Tribunal's decision to dismiss the tenant's claim for rent reduction was a miscarriage of the Tribunal's discretion.
2. At the hearing, Mr Malone, for the tenant, submitted that the Tribunal failed to address the tenant's evidence and submission that the landlord reduced the facilities or services by the reduction in air quality. We understand this to be the substance of the second ground.
3. We are satisfied that these grounds raise questions of law, and that the tenant may therefore appeal as of right (Civil and Administrative Tribunal Act 2013 (NSW), s 80(2)(b)).

Did the Tribunal wrongly require the tenant to prove that the mould was the landlord's fault?

1. The tenant argued that the Tribunal had erred, in stating that the tenant had to establish, in order to ground an entitlement to an order under s 44(1)(b) of the RT Act, that the mould was the landlord's fault. Mr Malone submitted that her onus was to show that there had been a withdrawal of goods, services and/or facilities, but not to establish the cause of the withdrawal. He submitted that the presence of mould in the property, notified to the landlord by the tenant, was enough to enliven s 44 of the RT Act.
2. The tenant also relied upon Shailer v Serisier [2016] NSWCATAP 131 at [22] where the Appeal Panel commented that the application of s 44(1)(b) of the RT Act "is not conditional upon, nor does it necessarily respond to a breach of any provision of the residential tenancy, and this will have profound effect on the application of a time limit for the making of an application for relief pursuant to section 44 before the Tribunal." The applicant's representative, Mr Malone, said that, given that it was not necessary to show any breach on the part of the landlord for s 44 to be enlivened, it was not necessary to show that the withdrawal or reduction of services or facilities was the landlord's fault.
3. Section 44(1)(b) applies where there is a "reduction or withdrawal by the landlord of any goods, services or facilities" (our emphasis). The words "by the landlord" must be given some work to do. In order to establish an entitlement to an order under s 44(1)(b), the tenant has to prove that, relevantly, services or facilities were withdrawn by the landlord. This follows from the text of s 44(1)(b) and is consistent with authority.
4. Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 also involved a tenant who made a claim under s 44(1)(b) of the RT Act on the basis of mould in residential premises. The Tribunal found that there had been no withdrawal of goods, services and facilities because the evidence did not establish that any rooms could not be used. The Appeal Panel found (at [104]) that the Tribunal had erred by failing to consider whether there had been a reduction in goods, services and facilities as opposed to a complete withdrawal of them. The Appeal Panel also held (at [113]) that the obligation to repair the premises, under s 63 of the RT Act, included an obligation to make good internal surfaces affected by mould which is caused by defects in the exterior of the premises. Where this did not occur, "an act or omission by the landlord giving rise to the state of disrepair [could] amount to a reduction or withdrawal of goods, services or facilities" (at [114]). As can be seen, the Appeal Panel (while not deciding this issue) appeared to contemplate that the landlord's liability under s 44(1)(b) depended upon a finding that there was a defect in the external walls or an act or omission of the landlord giving rise to the state of disrepair.
5. The comment in Shailer v Serisier [2016] NSWCATAP 131 that it was not necessary to establish a breach in order to enliven s 44 was made in the context of considering whether the Tribunal had correctly decided that an application was partly out of time. That case involved a situation where water had been leaking into residential premises for about 30 weeks until final repairs were effected. The tenant brought claims for compensation and rent reduction. The Tribunal accepted that there had been a breach by the landlord, but rejected part of the claim for compensation because it was out of time. (Where a tenant claims that the landlord has breached s 63 of the RT Act, the tenant has only three months to bring a claim (Residential Tenancies Regulation 2010, cl 22(9)). The Tribunal only considered the claim in respect of the three months before the application to the Tribunal, and (wrongly) did the same in relation to the rent reduction claim. It was in this context that the Appeal Panel commented that s 44(1)(b) did not necessarily respond to a breach.
6. It may be that the Appeal Panel's comments in Shailer v Serisier [2016] NSWCATAP 131 were intended to mean that s 44(1)(b) was not dependent upon an actionable breach. Whether or not this is so, it does not follow from the lack of necessity to prove a breach that the tenant does not have to establish that the withdrawal or reduction of goods, services or facilities was "by the landlord."
7. We are not persuaded that the Tribunal erred in asking itself whether the mould was the landlord's fault. It was necessary for the tenant to establish that the landlord reduced or withdrew services or facilities. The tenant failed to establish that the landlord caused, or had any responsibility for the mould in the premises, meaning that the tenant failed to discharge her onus under s 44(1)(b).
8. The tenant referred, in her submissions, to the "accepted facts" that there was mould in the property, that the tenant had notified the landlord of this and that the landlord had not responded satisfactorily to the tenant's requests for repairs. She said that this brought "into question" the landlord's obligations under s 63 of the RT Act (dealing with the landlord's obligation to maintain the premises in a reasonable state of repair).
9. If there had been a high level of mould in the premises, it might have been possible to infer that the cause of the mould was some defect for which the landlord was responsible, such as inadequate ventilation, broken or breached damp proof courses, guttering problems, cracks in mortar and joints, cracked lead flashing, or ineffective drains. However, the Tribunal did not accept the tenant's claims that there was a high level of mould in the property, making the bedrooms unusable. Rather, it only found that there was "some level of mould." This was supported by the report of the respondent's expert which concluded that there was "low-level mould contamination" in March 2018. Further, the respondent's evidence was that, at routine inspections, there was very little mould in the property. It was therefore open to the Tribunal, to find as it did, that there was some mould and that it did not render the bedrooms unusable. It was also open to the Tribunal to find that the tenant had not established that the landlord was responsible for the mould, nor that there was any breach of s 63 of the RT Act.

Failure to consider reduction in services or facilities

1. The tenant's second argument was that the Tribunal made the same error as that identified in Roberts, by failing to consider whether there was a reduction in services or facilities (as opposed to a complete withdrawal of them). The tenant said that it erred by failing to address her claim that the mould affected the air quality in the premises (a reduction of services or facilities). It focused only on her claim that she was unable to use the bedrooms (characterised by the applicant as being a withdrawal of services).
2. The Tribunal did not need to determine the issue of air quality once it had found that the tenant had not established that the withdrawal or reduction of services or facilities was "by the landlord." Accordingly, the Tribunal did not make any error in failing to deal with the reduction in air quality.

Orders

1. For these reasons, we make the following order: 1. The appeal is dismissed.

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: 25 October 2018