Dhorajiwala PCT Pty Ltd v Peacock

NCAT Appeal Panel|2022-09-21

REASONS FOR DECISION

This is an appeal from a decision of the Tribunal involving a dispute in relation to water ingress into rented premises.
In this appeal the appellant landlord appeals the Tribunal's decision to order a rent reduction under s 44(1)(b) of the Residential Tenancies Act 2010 (NSW) (the RT Act).
For convenience, in this decision we will refer to the appellant as the landlord and the respondent as the tenant.
For the reasons that follow we have decided to dismiss the appeal.

Timing

The landlord filed the appeal on 30 June 2022 which is 14 days after the landlord was notified of the decision. Under r 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW), the time to appeal a residential tenancy decision is 14 days from the date on which the appealing party was given or notified of the decision. The appeal was lodged in time.

Background

The background to the appeal, which is based on information contained in documents filed in the appeal proceedings and told to us during oral submissions, is as follows. We note that neither party has provided to us all of the documents which were before the Tribunal at first instance.
The tenant entered into a residential tenancy agreement with the landlord on 31 January 2022, for residential premises at Birmingham Gardens, New South Wales ('premises'). The agreement continues on foot.
The agreed weekly rent payable under the agreement is $635.
The premises consist of five bedrooms, two bathrooms, a granny flat, a front and rear yard and other amenities. The downstairs area, which is the area affected by the water ingress complained of by the tenant, consists of one bedroom plus a rumpus/lounge room.
On 15 March 2022 the tenant first notified the landlord of water ingress into the downstairs area. The parties agreed that the downstairs area was uninhabitable at least from 15 March to 3 April 2022.
On 31 March 2022 the tenant lodged an application in the Tribunal seeking repairs, a rent reduction and compensation.
On 1 April 2022 the landlord offered the tenant to be released from the residential tenancy agreement but this offer was not accepted by the tenant.
On 3 April 2022, after an initial attempt to repair was unsuccessful, the landlord arranged for a plumber to carry out further repairs. The landlord understood the water ingress issue to have been resolved at that time.
On or about 1 May 2022 the tenant obtained an expert report which indicated that the downstairs area continued to be uninhabitable.
Some time in late May 2022 the tenant notified the landlord that the water ingress issue was continuing.
The matter came before the Tribunal for a final hearing on 3 June 2022. By that time the tenant had withdrawn her claim for compensation and was only pressing for a rent reduction of 44% of the rent payable from 15 March 2022. It is not clear whether the tenant was also pressing for an order for repairs but in any event the Tribunal member declined to make an order for repairs citing the fact that she did "not have the report that the landlord is waiting for". The Tribunal member did however observe that "the landlord is doing everything he can to repair this issue".
The Tribunal found that the area in question continued to be uninhabitable, that there had been a withdrawal of facilities within the meaning of s 44(1)(b) of the RT Act, and that the tenant was entitled to a rent reduction. However, the Tribunal concluded that the tenant's claimed reduction of 44% was excessive. The Tribunal analysed the nature and extent of the facilities which were unusable in the context of the facilities at the rented premises as a whole, and decided that the rent should be reduced by $100 per week (which equates to slightly less than 16% of the weekly rent) from 15 March 2022 "until such time as the downstairs area is remediated and able to be used again". The Tribunal also made an order requiring the landlord to credit the tenant's rental account with $100 per week from 15 March 2022.

Scope and nature of internal appeals

An appeal is not simply an opportunity for a dissatisfied or aggrieved party to re-argue the case they put at first instance: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].
To succeed in an appeal, the appellant must demonstrate either an error on a question of law, which, except in an appeal from an interlocutory decision, may be argued as of right; or that permission (that is, "leave") to appeal should be granted to bring the appeal: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 80(2).
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl. 12(1) of Sch. 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 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).
In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
Even if an appellant from a decision of the Consumer and Commercial Division requiring leave to appeal has satisfied the requirements of cl. 12(1) of Sch. 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act. The appellant must demonstrate something more than the Tribunal was arguably wrong (Pholi v Wearne [2014] NSWCATAP 78 at [32]).
In Collins v Urban, the Appeal Panel stated 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; (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.

Grounds of appeal

The grounds of appeal contended by the landlord are as follows: 1. The decision was against the weight of evidence; and 2. The decision was not fair and equitable.
In its Notice of Appeal, the landlord flagged that it may also seek leave to appeal on the basis that significant new evidence had arisen that was not reasonably available at the hearing. The landlord suggested that it was in the process of obtaining further reports "to ascertain if there was a leak". However, no such report was provided to the Appeal Panel and this ground was not pressed at the hearing.
Neither of the grounds of appeal involve an error on a question of law and therefore the landlord requires leave to appeal.
The other issues raised by the landlord at the hearing are, in substance, the landlord seeking to re-argue its case at first instance and do not establish an error of law or an error of a type that leave to appeal should be granted.

Ground 1 - Weight of evidence

The landlord says that the decision was against the weight of evidence because: 1. No evidence had been provided by the tenant as to "how the water leak appeared only a week before the tribunal hearing"; 2. Evidence had been supplied by the landlord that urgent repairs had been commenced as soon as any issues had been raised by the tenant; 3. The ledger supplied in evidence reflected that the tenant was in "constant arrears" and that rent payments had been dishonoured 13 times in the previous five months; and 4. Towards the end of the hearing the tenant "confessed that mould was no longer an issue".
A decision under appeal can be said to be against the weight of evidence where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal Member could reach: Collins v Urban at [77].
The landlord has provided neither copies of all the documents which were before the Tribunal, nor a complete sound recording of the hearing, nor a typed transcript of the relevant parts of the hearing. The only material before the Appeal Panel in this regard was the short audio recording referred to above which was played during the hearing of the appeal. In the absence of these materials, the Appeal Panel does not have sufficient information to assess whether the Tribunal's conclusions were open to it on the evidence before it. For example, without a copy of the ledger or other rental records which were before the Tribunal at the hearing, we cannot know what the evidence showed about the tenant's payment history.
Although the recording played during the hearing included a statement by the tenant to the effect that mould was no longer an issue, the tenant also made statements suggesting that she did not consider the downstairs to be habitable because the linoleum floors had not been replaced. Moreover, the Tribunal's finding (at [44]) that the premises were partially uninhabitable was not stated to be premised on the tenant's evidence as to whether there was mould at the premises, but rather on the evidence given by the tenant's expert that the downstairs part of the premises was uninhabitable. Nothing to which the landlord has referred provides any reason for doubting that the Tribunal's reliance upon that report was unsafe.
With regard to the landlord's point about the leak recurring a week prior to the hearing, we understand the landlord to be asserting that the fact that this issue was said to have recurred so soon before the hearing date suggests that the tenant's evidence in this regard was untrustworthy. However, this is nothing more than conjecture. The landlord has pointed to nothing in the evidence which substantiates this serious allegation.
The landlord also says that the Tribunal should have given more weight to the evidence that the landlord had diligently attended to the repairs. However, the Tribunal's decision makes plain that this evidence was indeed taken into account and that the Tribunal did not consider that it was relevant to whether there had been a withdrawal of facilities for the purpose of s 44(a)(b). For example at [38] the Tribunal said: I understand that the landlord has made valid attempts to repair the problem. He made the mistake of engaging an air-tasker initially which was to his detriment. The air-tasker made matters worse. I accept that the landlord took all relevant steps that he needed to take. This does not however mean that the facility the subject of this dispute was made usable.
For these reasons, having considered the limited materials before us, we are not persuaded that the Tribunal has given insufficient weight to the matters referred to by the landlord.
Further, the landlord has provided no explanation as to how the landlord's diligence in carrying out repairs, or the tenant's alleged history of arrears, were relevant to the question which was before the Tribunal (being whether the rent should be reduced due to a withdrawal of facilities). In addition, we do not know what submissions, if any, were made to the Tribunal at the first instance hearing in connection with these matters. Accordingly, we could not be satisfied that the landlord may have suffered a substantial miscarriage of justice even if we had been satisfied that the Tribunal's conclusions in relation to these matters were against the weight of evidence.

Ground 2 - Decision not fair and equitable

We are unable to identify any basis for the assertion that the decision is not fair and equitable, noting that whether a decision was not fair and equitable will involve a consideration of whether there has been an unfairness in the way the proceedings have been conducted or some other denial of procedural fairness. The landlord has not identified anything about the conduct of the proceedings which would lead us to the conclusion that the decision was not fair or equitable.
The crux of the landlord's submission as we understand it is that the rent reduction awarded was "excessive" because there was no reported water leakage or mould damage during the seven week period between the completion of the initial repairs on 2 April 2022, and the time the tenant reported that the issue had recurred in late May 2022. This does not go to whether the decision was not fair and equitable but does appear to raise a further question as to whether the decision was against the weight of evidence.
For the reasons explained above, without the benefit of all of the materials which were before the Tribunal, or the full sound recording of the hearing, we cannot be satisfied that the decision of the Tribunal that the premises were partially uninhabitable during this seven week period was against the weight of evidence. In any case, as mentioned above, the Tribunal found at [44], that the tenant's expert report which was dated 1 May 2022 established that the downstairs area had been continually uninhabitable for the relevant period. Neither party has provided to us a copy of the tenant's expert report and as far as we are aware the landlord did not provide his own expert report to the Tribunal. Furthermore, the landlord has not pointed to any other evidence which was before the Tribunal which may have refuted the evidence of the tenant's expert. There is nothing in the limited materials available to us which persuades us that the Tribunal's finding regarding the habitability of the premises was not open to it.
The landlord also says the decision was not fair and equitable because the Tribunal did not take into account the fact that the landlord had made a payment of $300 to the tenant "as a goodwill gesture … for the inconvenience".
However, it is apparent from the Tribunal decision that evidence of this $300 payment was indeed taken into account as it is referred to at paragraphs 12 and 43 of the decision. Moreover, the landlord has not explained how the payment of a one off "goodwill gesture" of $300 was relevant to the matters which the Tribunal was required to determine.
Accordingly we are not persuaded that this ground of appeal is made out.

Exercise of discretion

For these reasons we are not satisfied that the landlord may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the Tribunal's conclusions were against the weight of evidence. Consequently, our discretion is not enlivened and it is not necessary to consider whether leave to appeal should be granted. We would add however that even if our discretion had been enlivened, we would have declined to exercise our discretion to grant leave to appeal as we are not satisfied that any of the factors referred to in Collins v Urban at [84] exist in this instance.
The landlord does not dispute that the water ingress rendered the downstairs of the premises uninhabitable at least until 2 April 2022. The landlord also does not dispute that there are repairs yet to be carried out, including the re-installation of the linoleum floor coverings. In addition, the rent reduction awarded by the Tribunal is a relatively small proportion of the total rent payable under the agreement. We do not consider that such circumstances would warrant the Appeal Panel exercising its discretion to grant leave to appeal.

Conclusion and Orders

For these reasons we make the following orders: 1. Leave to appeal refused. 2. Appeal 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: 30 September 2022

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