Di Liristi v Matautia Developments Pty Ltd

Solicitors: Darby Jones Lawyers (Appellant) Centurion Lawyers (First and second respondents) File Number(s): 2021/192227 Decision under appeal Court or tribunal: Supreme Court of New South Wales Jurisdiction: Common Law Division Citation: Di Liristi v Matautia Developments Pty Ltd (No 6) [2021] NSWSC 663 (Cavanagh J) Di Liristi v Matautia Developments Pty Ltd (No 7) [2021] NSWSC 760 Date of Decision: 23 June 2021 Before: Cavanagh J File Number(s): 2020/71955

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] The appellant, Mr Antonio Di Liristi (Di Liristi), entered into a residential tenancy agreement in respect of premises at Austral with the respondent, Matautia Developments Pty Ltd (Matautia), for a period of three years commencing 1 August 2019. Di Liristi permitted a large quantity of soil to be brought onto the property to level it between June and November 2019. In December 2019, Liverpool City Council (the Council) issued a Clean-Up Notice to Matautia requiring it to have the fill classified and analysed prior to its removal. Matautia, through a consultant, commissioned Aargus Pty Ltd (Aargus) to conduct a soil assessment. Following a site inspection and collection of soil samples by representatives of Aargus on 7 January 2020, Aargus provided a report dated 24 January 2020 authored and signed by Mr Balakrishnan, an environmental engineer, and reviewed and signed by Mr Kelly, an environmental manager (the first Aargus report). Mr Kelly did not attend the property as part of the site inspection. The report attached laboratory certificates from Australian Safer Environment & Technology Pty Ltd (ASET) stating that asbestos had been detected in 6 of the 17 soil samples. On 5 March 2020, Di Liristi commenced proceedings in the Supreme Court against Matautia in relation to disputes concerning the property. Subsequently, on 23 March 2020, Matautia's solicitors served a notice of termination on Di Liristi which required vacant possession on 6 April 2020. Di Liristi did not vacate the premises and has remained in possession of the property. On 31 July 2020, Matautia filed a cross-summons seeking declarations that Di Liristi was in breach of the tenancy agreement and that Matautia was entitled to an order for termination and for possession of the property, as well as claiming damages for the costs of remediation of the property and unpaid rent. Although no orders were made for the service of expert reports, both parties served expert reports on the issue of whether the imported fill was contaminated: Matautia served the first Aargus report; Di Liristi served a report by Geotech Soil Solutions Pty Ltd and Matautia served a report in reply by Aargus. Both the Geotech report and the second Aargus report were served late. In support of its claim for damages for the cost of the clean-up of the premises, Matautia relied on two quotes it had obtained dated 6 and 7 May 2020. At trial, the first and second Aargus reports were admitted over objection. Di Liristi did not object to the tender of the two quotes for the costs of the clean-up. The primary judge found that Di Liristi had introduced contaminated soil onto the property, which entitled Matautia to issue the notice of termination. The primary judge gave judgment for Matautia on its cross-claim for $311,389, comprising damages for the cost of remediation of the land and unpaid rent, among other costs. Di Liristi's appeal raised the following issues: the admissibility of, or weight that could be given to, the two expert reports prepared by Aargus; the admissibility of, or weight that could be given to the two quotes, and whether the primary judge erred in awarding damages for clean-up costs; and the award of damages for unpaid rent. Held, dismissing the appeal (per Gleeson JA, Macfarlan and Brereton JJA agreeing): As to the first issue The first Aargus report was admissible as a business record of Matautia pursuant to s 69 of the Evidence Act 1995 (NSW): the report belonged to or was kept by Matautia in the course of, or for the purpose of, its business of owning and leasing the property (s 69(1)(a)); the report was made for the purposes of its business (s 69(1)(b)); and statements made in the report were made by Mr Balakrishnan who had the requisite degree of personal knowledge of the asserted facts, or were made on the basis of information directly or indirectly supplied to Mr Balakrishnan by ASET who had or might reasonably be supposed to have had personal knowledge of the asserted facts concerning the analysis of the soil samples (s 69(2)): [46]-[53]. Maaz v Fullerton Property Pty Ltd [2021] NSWCA 79; Gregg v R [2020] NSWCCA 245; Australian Securities and Investments Commission v Rich [2005] NSWSC 417; (2005) 53 ACSR 752; Ritz Hotel Ltd v Charles of the Ritz Ltd (Nos 13, 18, 19) (1988) 14 NSWLR 116; Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (2012) 207 FCR 448; Jadwan Pty Ltd v Rae & Partners (A Firm) (No 3) [2017] FCA 1045 referred to. The carve out in s 69(3) was not engaged with respect to the first Aargus report. No reliance was placed by Di Liristi on s 69(3)(b) that this report contained a representation made in connection with an investigation relating or leading to a criminal proceeding. Nor were civil proceedings "likely" or "reasonably likely" at the time the representations in the report were prepared or obtained (s 69(3)(a)): [55]-[59]. Averkin v Insurance Australia Ltd (2016) NSWLR 68; [2016] NSWCA 122; Nikolaidis v Legal Services Commission [2007] NSWCA 130 referred to. The primary judge did not err in giving weight to the first Aargus report: it was not to the point that Mr Kelly did not attend the site inspection, and the weight to be given to the previous representations contained in the report was not lessened by the absence of Mr Balakrishnan or Mr Zhang of Aargus, or the author of the ASET certificates for cross-examination: [61]-[65]. Although the primary judge did not use the words "exceptional circumstances" when admitting the second Aargus report, which was served less than 28 days prior to the hearing, his Honour can be taken to have considered that such circumstances were established for the purposes of Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 31.28(4) as both parties had served expert reports despite no directions being made for expert reports; both reports had been served late; the report was in reply to the Geotech report; and both parties had a fair opportunity to cross-examine the other's expert: [69]-[71]. As to the second issue Since Di Liristi made no objection at trial to the tender of the two quotes, the Court should deal with the issue of their admissibility on the basis that there is no objection to the quotes as hearsay: [74]. Perish v R (2016) 92 NSWLR 161; [2016] NSWCCA 89 referred to. The primary judge was entitled to use the quotes as some evidence of the cost of remediaton, which was not contradicted by any evidence adduced by Di Liristi, nor challenged in cross-examination: [76]-[78]. Paino v Paino [2008] NSWCA 276; Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 196 ALR 257 referred to. While the court has a duty to unrepresented litigants, it is not for the trial judge to raise questions of admissibility: [81]. There was no procedural unfairness to Di Liristi in dealing with objections to Matautia's affidavit evidence. The primary judge gave time for Di Liristi to consider whether to object to the evidence, which Di Liristi had not overlooked, given that he had earlier referred to the quotes in his opening address in the context of his own claim for damages against Matautia for alleged failures to repair and maintain the property: [82]-[86]. Hamod v New South Wales [2011] NSWCA 375; Harrington-Smith on behalf of The Wongatha People v State of Western Australia (No 7) (2003) 130 FCR 424; [2003] FCA 893; Bauskis v Liew [2013] NSWCA 297; Pollock v Hicks [2015] NSWCA 122 referred to. As to the third issue Di Liristi's argument that the tenancy agreement terminated on 6 April 2020 and Matautia's remedy was loss of bargain damages (which it had not proved), ignored the provisions of the Residential Tenancies Act 2010 (NSW). A tenancy agreement only terminates in the circumstances specified in s 81. As Di Liristi has not vacated the premises and the Tribunal had not yet made an order terminating the agreement, the agreement remained on foot. Matautia had an accrued right to liquidated damages for unpaid rent of $600 per week from 11 September 2019 to the date of judgment on 23 June 2021: [95]-[97].

Judgment

1. MACFARLAN JA: I agree with Gleeson JA.
2. GLEESON JA: This appeal concerns a dispute in relation to the termination of a residential tenancy agreement.
3. The facts in outline are as follows. The appellant, Mr Antonio Di Liristi (Di Liristi), entered into a residential tenancy agreement in respect of premises at Austral with the respondent, Matautia Developments Pty Ltd (Matautia), which is the lessor and registered proprietor. It seems that the property is at least ten acres in size.
4. The lease was for a period of three years commencing 1 August 2019 with an option for a further three years. The agreement provided for rent of $300 per week commencing on 1 August 2019 until 1 September 2019 and thereafter $600 per week for the term of the agreement. The agreement also contained special conditions which permitted Di Liristi to set-off against the rent owing to Matautia four amounts totalling $4,564.50 in specified circumstances.
5. The agreement gave Di Liristi the right to sub-lease part of the property and he did so with persons who wanted to store their trucks on the land. Di Liristi also allowed the property to be used by other persons for other purposes and brought some fill in to level a part of the land which he intended to sub-lease. A large quantity of soil was brought onto the property with Di Liristi's permission between June and November 2019.
6. On 18 December 2019, Liverpool City Council (the Council) issued a Clean-Up Notice to Matautia requiring it to (1) immediately cease all activities relating to what was described as the "pollution incident", (2) prevent heavy vehicles containing fill or any other materials from entering the subject premises, and (3) cease depositing fill or any other material onto the subject premises. The notice also required that all introduced fill material spread and compacted on the property be "classified and analysed by an appropriately qualified and certified consultant in accordance with the Protection of the Environment Operations (Waste) Regulation 2014 (NSW) and related guidelines, in particular the NSW EPA Waste Classification Guidelines, prior to off-site disposal".
7. Matautia engaged Mr David Whitting, a project manager with a background in surveying, to assist with compliance and the clean-up notice. Mr Whitting, on behalf of Matautia, commissioned Aargus Pty Ltd (Aargus) to conduct a soil assessment to classify and analyse the imported fill material at the property.
8. Representatives of Aargus, Mr Gokul Balakrishnan, an environmental engineer, and Mr Ningye Zhang, a field scientist, conducted a site inspection of the property on 7 January 2020 and obtained 17 soil samples from the imported fill. Aargus provided a report to Matautia dated 24 January 2020 authored and signed by Mr Balakrishnan and reviewed and signed by Mr Mark Kelly, an environmental manager (the first Aargus report). The report attached laboratory certificates from Australian Safer Environment & Technology Pty Ltd (ASET) stating that asbestos had been detected in 6 of the 17 soil samples; three samples had been taken from boreholes on the imported fill pad and three samples had been taken from several imported stockpiles. The report made recommendations as to the volume of fill, totalling 520m3, required to be removed from those areas where contaminated soil had been detected.

The proceedings below

1. On 5 March 2020, Di Liristi commenced proceedings in the Common Law Division of the Supreme Court seeking a variety of relief against Matautia, among others, in relation to disputes concerning the property. The relief included declarations that there was a valid lease between Matautia and Di Liristi, and that Matautia was estopped from terminating the tenancy agreement, as well as damages arising from alleged failures by Matautia to repair or maintain the property in accordance with its alleged obligations under the tenancy agreement.
2. Matautia's solicitors served a notice of termination on 23 March 2020 purporting to terminate the tenancy agreement, alleging five breaches of the agreement by Di Liristi relating to the introduction of fill material to the property. The notice required vacant possession on 6 April 2020. Di Liristi failed to vacate the premises by that date and has remained in possession since.
3. On 31 July 2020, Matautia filed a cross-summons seeking declarations that Di Liristi was in breach of the tenancy agreement, and that Matautia was entitled to an order for termination of the agreement and for possession pursuant to the Residential Tenancies Act 2010 (NSW). Matautia sought orders for the proceedings to be transferred to the NSW Civil and Administrative Tribunal (the Tribunal or NCAT) for the purposes of the Tribunal making orders for termination of the tenancy agreement and for possession of the premises. Matautia also made a claim for damages for the cost of the clean-up of the premises and for unpaid rent.
4. Directions for the service of evidence in support of the amended summons and the cross-summons were made by the Registrar on 21 September 2020, when the proceedings were set down for hearing. Although no orders were made for the service of expert reports, both parties served expert reports on the issue of whether the imported fill was contaminated. Matautia served an affidavit by Mr Whitting dated 10 December 2020 which exhibited the first Aargus report. Since Aargus had not been engaged or appointed in January 2020 for the purpose of providing a report for use as evidence in proceedings or proposed proceedings, Mr Balakrishnan and Mr Kelly were not "expert witnesses" within the definition of that expression in Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 31.18. Accordingly, contrary to the submission by Di Liristi below, Mr Balakrishnan and Mr Kelly were not required to include an acknowledgement in the first Aargus report that they had read the Expert Witness Code of Conduct and had agreed to be bound by it, as referred to in r 31.23(3).
5. Di Liristi served an affidavit dated 13 February 2021 on 16 February 2021 annexing a report by Mr Ryan Foggett of Geotech Soil Solutions Pty Ltd (Geotech report) dated 4 February 2021. That evidence was served late; it was due on 5 February 2021. The delay in serving the Geotech report was unexplained. Matautia's evidence in reply included an affidavit of Mr Kelly attaching a further report of Aargus dated 2 March 2021 (the second Aargus report), which was served on that date. That evidence was also served late; it was due on 19 February 2021. The second Aargus report contained an acknowledgment by Mr Kelly that he had read and agreed to be bound by the Expert Witness Code of Conduct.
6. In support of its claim for damages for the cost of the clean-up of the premises, Matautia relied upon two quotes contained in an exhibit to Mr Whitting's affidavit and also evidence from Mr Whitting as to additional costs involved in remediating the premises. One quote was from EnviroManage Systems (EMS) dated 6 May 2020 in the sum of $232,652; the other was from RSA Civil Group dated 7 May 2020 in the sum of $643,950.
7. The trial was conducted over six days in March 2021; Di Liristi was self-represented. Counsel for Matautia opened the case on the basis that there were two breaches sufficient to justify the notice of termination. The first was that Di Liristi had brought a large amount of soil onto the property (whether or not it was contaminated). The second was that the soil brought onto the property was contaminated.
8. Di Liristi made several objections to admissibility of the first and second Aargus reports. Those reports were admitted over objection in an ex tempore judgment given on 12 March 2021: Di Liristi v Matautia Developments Pty Ltd (No 4) [2021] NSWSC 661 (Judgment No 4). His objection to the admissibility of the clean-up notice was also rejected. Di Liristi did not object to the tender of the two quotes for the costs of the clean-up exhibited to the Whitting affidavit, or to Mr Whitting's evidence concerning other costs of remediation.
9. In his principal judgment delivered on 11 June 2021, the primary judge (Cavanagh J) found that Di Liristi had introduced contaminated soil to the property without Matautia's consent, which entitled Matautia to issue the notice of termination, and made orders to the effect that: (1) Di Liristi's summons be dismissed; (2) it was declared that Matautia had validly terminated the lease; (3) it was declared that Matautia was entitled to possession of the property; (4) there be liberty to apply to have the matter relisted for determination of the issues relating to damages and costs; and (5) Matautia was directed to provide a schedule of unpaid rent. See: Di Liristi v Matautia Developments Pty Ltd (No 6) [2021] NSWSC 663.
10. Neither party challenged the jurisdiction of the Supreme Court to make a declaration, in the circumstances of this case, that Matautia was entitled to possession of the property, given the terms of the Residential Tenancies Act, in particular, s 81(3): see the discussion by Brereton JA on the application for a stay: Di Liristi v Matautia Developments Pty Ltd [2021] NSWCA 163. The interlocutory orders made by Brereton JA on 27 July 2021 pending the determination of the appeal were dissolved by this Court at the conclusion of the oral argument on 3 November 2021.
11. Following a further hearing on 23 June 2021, the primary judge delivered a supplementary judgment on that date, in which he rejected several applications by Di Liristi, and made orders to the following effect: (1) Judgment for Matautia on its cross-claim against Di Liristi in the sum of $311,389; (2) Di Liristi pay Matautia's costs; and (3) The proceedings be transferred to NCAT for the making of an order for termination of the residential tenancy agreement. See: Di Liristi v Matautia Developments Pty Ltd (No 7) [2021] NSWSC 760.
12. The judgment sum of $311,389 comprised the following amounts by way of damages for the cost of remediation of the property, related costs and unpaid rent: Head of Damage Amount Unpaid Rent (including interest) $60,238.42 Remediation costs $232,652.00 Traffic control costs $1,050.00 Environmental consultation costs $11,632.60 Project management costs $5,816.30 Total $311,389.00

Matters not in issue

1. It is of assistance to record several matters which are not in issue on the appeal.
2. First, counsel for Di Liristi acknowledged that there is no challenge to the finding that the bringing of soil onto the property was a breach of the tenancy agreement justifying termination by Matautia. Nor is there any challenge to the finding that no reliance could be placed on the Geotech report.
3. Second, there is no challenge to the declarations in orders 2 and 3 made on 11 June 2021 that the notice of termination was valid and Matautia is entitled to possession of the property. Nor does Di Liristi challenge order 3 made on 23 June 2021 transferring the proceedings to the Tribunal for the making of a termination order in accordance with declarations 2 and 3 made on 11 June 2021.

Primary judge's reasons

1. It is only necessary to refer to those findings in the principal judgment and the supplementary judgment relevant to the issues raised by the grounds of appeal.

Principal judgment

1. In his principal judgment, his Honour made the following findings:

• from June to November 2019 Di Liristi allowed and arranged for a large quantity of soil to be deposited on the land (J [118]);
• the opinion in the first Aargus report should be preferred to the Geotech report, as to the existence on contaminated soil on the premises (J [147]);
• Di Liristi had introduced contaminated soil onto the land and having regard to the clean-up notice it must be removed (J [151]);
• the introduction of contaminated soil was not done with the knowledge or consent of Matautia (J [166]);
• bringing a large quantity of contaminated soil onto the land without Matautia's consent constituted a breach of the tenancy agreement by Di Liristi (J [173]);
• Matautia had validly terminated the tenancy agreement (J [175]);
• the matter should be transferred to NCAT to make the appropriate orders (J [175]);
• Matautia was entitled to damages for the cost of remediating the land, which his Honour would assess in an amount of $232,652, being the lesser of the two quotes obtained by Matautia, subject to giving the parties an opportunity to be heard further on the assessment of damages (J [202], [205]); and
• Matautia is entitled to the payment of unpaid rent (J [207]).

Supplementary judgment

1. In closing written submissions at trial, Matautia sought an order that the assessment of damages for clean-up costs be deferred until completion of the remediation, since the cost of remediation was subject to considerable uncertainty, as the quantum of material to be removed, according to the requirements of regulatory authorities, was currently unknown. Di Liristi took the position that the property did not need remediation, but that if it did, the Court should order that Di Liristi himself remove it rather than paying removal costs.
2. As indicated in his principal judgment, the primary judge did not accept this submission and allowed, having indicated his conclusion on damages, the parties an opportunity to be heard on that issue. At the further hearing on 23 June 2021, Di Liristi submitted that the damages issue should be set down for hearing on another day. He also submitted that no damages should be awarded for the cost of remediation because "[t]hat may or may not happen". Matautia changed its position from that which it had taken at the trial; it sought an assessment of damages based on the lower quote of EMS of $232,652, together with other costs identified in Mr Whitting's affidavit, which it said was uncontradicted and unchallenged.
3. In his supplementary judgment, the primary judge noted that the case was run and concluded on all issues and although Di Liristi extensively cross-examined Mr Whitting, he did not ask him any questions about that part of his affidavit concerning further costs associated with remediating the property, nor raise any issue in respect of the two quotes attached to his affidavit for the costs of remediation. In the circumstances, his Honour was satisfied that there was no reason why judgment should not be finalised on all issues.
4. His Honour rejected Di Liristi's application that the hearing of the damages issues be set down for another day. His Honour explained that the only reason that this issue had not been determined in his principal judgment was because he wished to ensure that Di Liristi was not disadvantaged by anything that might have been said by the legal representatives of the defendants during the course of the hearing about deferring any damages issues. His Honour recorded that Di Liristi and counsel for Matautia had both confirmed to the Court that there was no discussion, statement or mention during the hearing of any deferral of any damages issues, and in the circumstances found that nothing said by the defendants caused Di Liristi to take any particular position in cross-examination of Mr Whitting. There is no challenge to his Honour's interlocutory decision refusing Di Liristi's application to adjourn the assessment of damages.

Grounds of appeal

1. The amended notice of appeal contains 11 grounds which give rise to three issues: 1. the admissibility of, or weight that could be given to, the two expert reports prepared by Aargus; 2. the award of damages for clean-up costs; and 3. the award of damages for unpaid rent (to the date of judgment) and interest thereon.
2. The relief sought by Di Liristi on appeal is limited to setting aside orders 1 and 2 made on 23 June 2021 on the cross-claim, being the judgment in the sum of $311,389.00 and the costs order. Alternatively, Di Liristi seeks remittal of the proceedings for a rehearing on the question of damages on the cross-claim. To obtain a rehearing, Di Liristi must establish that a substantial wrong or miscarriage has been occasioned by, relevantly, any error of law, improper admission of evidence or on any other ground: UCPR, r 51.53.

A. Admissibility of Aargus reports

1. The first Aargus report identified the scope of works as being a soil assessment of the central portion of the property, referred to the site inspection carried out on 7 January 2020, identified the soil assessment criteria against which the soils onsite and stockpiled materials were assessed, and set out the investigation methodology and the quality assurance/quality control measures adopted to ensure sample integrity, which included a chain of custody record in relation to the 17 soil samples obtained from the property: 8 from the pad area (surface-to-near-surface), 8 from the 4 stockpiles, and 1 from the embankment (from the surface at the bottom of the embankment of the padding area). The chain of custody record contained previous representations that the samples were obtained by "NZ/GB" and were received by ASET on 8 January 2020 at 4 pm. Mr Kelly gave evidence that "NZ" was Mr Zhang and "GB" was Mr Balakrishnan and both had attended the site inspection at the property on 7 January 2020.
2. The attachments to the report included two laboratory certificates by ASET dated 10 January 2020 analysing the 17 samples. The certificates recorded that detection at levels above the reporting limit specified in AS4964-2004 of 0.01 per cent (0.1g/kg) would be recorded as "asbestos detected" and that trace amounts would be reported only when trace analysis had been performed. Any amounts detected below 0.01 per cent would be reported as "No asbestos detected".
3. The report set out and discussed the laboratory results, relevantly: • asbestos was detected in three samples in the pad area (BH1, BH2 and BH6) and three samples in the stockpile area (SP1, SP3 and SP4); • there was an elevated concentration of benzo(a)pyrene (as TEQ) concentration of 3.2 mg/kg in one sample in the pad area - BH3 (0-0.2m) - which exceeded the Health Investigation Level for recreational use "C" of 3.0mg/kg.
4. Under the heading "Result Discussion", the report noted: • The approximate area of the fill pad is 1,400 m2 with the deepest fill located in the south-west corner, being 1.1m; • The volume of the fill works out at approximately 700m3; • Asbestos detected in fragments was encountered in samples recovered from boreholes BH1, BH2 and BH6 and in stockpiles SP1, SP3 and SP4.
5. The opinion expressed in the report was: Therefore, the soils in the vicinity of boreholes BH1, BH2, BH3 & BH6 and stockpiles SP1, SP3 and SP4 are not suitable to stay on-site and [are required] to be classified and then appropriately disposed of off-site to an EPA-licensed landfill that can accept the classified waste.
6. The report recommended that a total of 520 m3 of soil be removed from the property: The approximate volume of fill materials to be removed is as follows: • Pad Area (BH1, BH2, BH3 & BH6) - 450m3 • Stockpile SP1 - 60m3 • Stockpile SP3 - 5m3 • Stockpile SP4 - 5m3.
7. In his evidence-in-chief, Mr Kelly adopted the contents of the first Aargus report.
8. Mr Kelly was the author of the second Aargus report, which responded to the findings in the Geotech report, including whether the Geotech report had tested for the existence of asbestos-containing materials at the site, and whether there were any deficiencies in the Geotech report.

(1) Objection to first Aargus report

1. Di Liristi submitted that the first Aargus report was inadmissible as hearsay evidence, or alternatively it should not be given any weight for several reasons: (1) the "true author" of the report was not called as a witness, (2) Aargus' instructions were not to conduct a full systemic sampling according to Environmental Protection Authority Guidelines, (3) Aargus did not test the soil samples itself, but delegated this task to ASET, and (4) the report does not state whether asbestos detected by ASET was at an acceptable level or not. Counsel for Di Liristi acknowledged that primary reliance was placed on the argument that the report should not have been given any weight.
2. Matautia repeated the submission which it had successfully advanced at trial, that the first Aargus report was admissible as a business record under s 69 of the Evidence Act 1995 (NSW). Given the conclusion I have reached on this issue, it is not necessary to consider Matautia's further submission in this Court relying upon the exception in relation to first-hand hearsay under s 64 of the Evidence Act.

Business records

1. Section 69 provides: 69 Exception: business records (1) This section applies to a document that - (a) either - (i) is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business, or (ii) at any time was or formed part of such a record, and (b) contains a previous representation made or recorded in the document in the course of, or for the purposes of, the business. (2) The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made - (a) by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or (b) on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact. (3) Subsection (2) does not apply if the representation - (a) was prepared or obtained for the purpose of conducting, or for or in contemplation of or in connection with, an Australian or overseas proceeding, or (b) was made in connection with an investigation relating or leading to a criminal proceeding. (4) If - (a) the occurrence of an event of a particular kind is in question, and (b) in the course of a business, a system has been followed of making and keeping a record of the occurrence of all events of that kind, the hearsay rule does not apply to evidence that tends to prove that there is no record kept, in accordance with that system, of the occurrence of the event. (5) For the purposes of this section, a person is taken to have had personal knowledge of a fact if the person's knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact).
2. The operation of s 69 is addressed in detail by Brereton JA in Maaz v Fullerton Property Pty Ltd [2021] NSWCA 79 at [58]. As explained in Maaz at [58], admissibility of a previous representation under s 69 is subject to three conditions: [58] Ultimately, the question whether a previous representation is admissible under s 69 depends on whether: (1) it is contained in a document which forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business, or at any time was or formed part of such a record (s 69(1)(a)); (2) it was made or recorded in that document in the course of, or for the purposes of, that business (s 69(1)(b)); and (3) it was made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact (s 69(2)).
3. Importantly, for the purpose of determining whether those conditions are satisfied, the Court may examine the document, and draw any reasonable inferences from it, as well as from other matters from which inferences may properly be drawn: Evidence Act, s 183. As stated in Maaz at [59], referring to Gregg v R [2020] NSWCCA 245 at [368] (Bathurst CJ, Hoeben CJ at CL agreeing), [714] (Leeming JA), which overruled National Australia Bank v Rusu (1997) 47 NSWLR 309; [1999] NSWSC 539: Thus, if the court can infer from the document itself that the conditions are satisfied, further evidence of the provenance of the document is not required to establish its admissibility.
4. It is also necessary to bear in mind that the file copy of a document can be the business record of the maker of the document, whilst the original of the document can be a business record of the recipient of the document: Australian Securities and Investments Commission v Rich [2005] NSWSC 417; (2005) 53 ACSR 752 at [186] (Austin J).
5. As to the first condition (s 69(1)(a)), the document in which the previous representation is contained must be, or at some time have been, part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business. As explained in Maaz at [60]: Documents which have not been generated by a business but are received by it from an external source and are retained by the recipient business for its purposes become part of the records of that business. (Citations omitted.)
6. Ritz Hotel Ltd v Charles of the Ritz Ltd (Nos 13, 18, 19) (1988) 14 NSWLR 116 involved the admissibility of passages from a company's annual report submitted to the Securities and Exchange Commission pursuant to an obligation imposed by the Securities Exchange Act of 1934 (15 U.S.C.). McLelland J said at 122 that the report was made for the purposes of the business because it was "required to be prepared and made as a necessary incident of the carrying on of the business".
7. Here, the Council, being an "appropriate regulatory authority" as defined in s 6(2) of the Protection of the Environment Operations Act 1997 (NSW), had the power to issue a clean-up notice under s 91(1) and to require an individual or business to furnish a report to the Council in relation to the notice under s 91(3). The first Aargus report was commissioned by Matautia to address the clean-up notice, specifically to classify and analyse the imported fill on the property prior to off-site disposal. It should be concluded that the records belonging to or kept by Matautia in the course of, or for the purpose of, its business of owning and leasing the property included the first Aargus report received by it on or about 24 January 2020.
8. In addition, the file copy of the report was a record of the activities of Aargus which belonged to or was kept by Aargus in the course of, or for the purpose of, its business of providing soil assessments: ASIC v Rich at [186].
9. As to the second condition (s 69(1)(b)), it is essential to identify the relevant business because the business to which it refers must be the same business as that referred to in the first condition (s 69(1)(a)): Maaz at [63], citing Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (2012) 207 FCR 448 at 459 [44]; [2012] FCA 1355 (Perram J), which was followed in Jadwan Pty Ltd v Rae & Partners (A Firm) (No 3) [2017] FCA 1045 at [25] (Kerr J).
10. That condition is satisfied here. The statements in the first Aargus report were made or recorded in the course of, or for the purposes of, Matautia's business of owning and leasing the property. And, the file copy of the report was made or recorded in the course of, or for the purposes of, Aargus' business of providing soil assessments.
11. As to the third condition (s 69(2)), Brereton JA explained in Maaz at [71]: … while s 69(2) requires the previous representation to have been made by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, it does not require that the person said to have the relevant personal knowledge have any particular relationship with the relevant business. … Representations made by strangers to the business which are recorded in a business record are admissible so long as the stranger had personal knowledge of the asserted fact. Moreover, it suffices that it can be concluded that the maker of the previous representation was a person who had personal knowledge of the fact, even though that person cannot be identified; so long as the nature and content of the recorded representation permits that inference, the supplier of the information need not be identified. (Citations omitted.)
12. It is not to the point on the question of admissibility that Mr Kelly did not attend the site inspection at the property, or obtain the soil samples, or conduct the laboratory tests himself. Here, it may readily be inferred that: 1. statements made in the body of the report sent by Aargus to Matautia were made by Mr Balakrishnan (in the business of Aargus) who either had the requisite degree of personal knowledge of the asserted facts as he had attended the site inspection on 7 January 2020 when the soil samples were obtained, or were made on the basis of information directly or indirectly supplied to Mr Balakrishnan by a person (in the business of ASET) who had or might reasonably be supposed to have had personal knowledge of the asserted facts concerning the analysis of the soil samples; and 2. statements made in the report and the attached chain of custody record were made by Mr Zhang and Mr Balakrishnan (in the business of Aargus) who had or might reasonably be supposed to have had personal knowledge of the asserted facts concerning the location of the boreholes (at the depth indicated) and the stockpiles, as shown on the plan described as Figure 3.
13. In addition, the file copies of the two laboratory certificates are business records of ASET, being records belonging to or kept by ASET in the course of, or for the purpose of, its business of analysing materials and containing statements recorded in the course of, or for the purpose of, that business. It may be readily inferred that the statements made in the file copies of the certificates sent by ASET to Aargus were made by a person (in the business of ASET) who had the requisite degree of personal knowledge that the 17 samples provided by Aargus for analysis on 8 January 2020, as recorded in the chain of custody record, were found to contain asbestos in excess of the acceptable limit of 0.01 per cent, relevantly:

• chrysotile asbestos and amosite asbestos in boreholes BH1 and BH2;
• chrysotile asbestos in borehole BH6 and stockpiles SP3 and SP4; and
• chrysotile asbestos, amosite asbestos and crocidolite asbestos in stockpile SP1.

Carve-out in s 69(3)

1. Counsel for Di Liristi placed no reliance on s 69(3)(b). He was correct not to do so. Although the criminal proceedings referred to in s 69(3)(b) may be in the future and may never eventuate, the investigation in connection with which the representation was made must be extant at the time it was made in order to fall within s 69(3)(b); it is not sufficient if a representation is made in connection with a possible investigation in the future, which might in turn lead to criminal proceedings: Averkin v Insurance Australia Ltd (2016) NSWLR 68; [2016] NSWCA 122 at [118] (Leeming JA, McColl JA agreeing).
2. Here, non-compliance with the clean-up notice, without reasonable excuse, was an offence: Protection of the Environment Operations Act, s 91(5). However, there is no suggestion in the evidence that Matautia permitted further fill to be imported onto the property after the clean-up notice was given on 18 December 2019. I do not consider that an inference is available that an investigation by the Council (which might lead to criminal proceedings) had commenced prior to the expiry of the time for compliance with the clean-up notice, being 8 weeks after the date of the notice. That conclusion is reinforced by the fact that on 6 February 2020, the Council issued a second clean-up notice to Matautia, effectively extending the time for removal of the contaminated soil to 12 weeks after the date of that second notice.
3. As to s 69(3)(a), counsel for Di Liristi faintly submitted that "we don't know" whether the first Aargus report was prepared in contemplation of these proceedings. No submission was advanced on the question of whether Di Liristi bears the burden of proof that s 69(3)(a) is satisfied, a matter left undecided in Averkin v Insurance Australia Ltd at [7]-[8] (Basten JA), [117] (Leeming JA). Aside from the question of onus, two questions arise: first, can it be said that legal proceedings were in contemplation and, second, if so, were they in the contemplation of the person or persons who prepared or obtained the relevant representations?
4. As to the first question, before it can be said that a representation was prepared or obtained in contemplation of a proceeding, it must be established that a proceeding was "likely" or "reasonably probable": Nikolaidis v Legal Services Commission [2007] NSWCA 130 at [61] (Beazley JA). Counsel for Di Liristi candidly acknowledged that the commencement of proceedings by Di Liristi against Matautia in March 2020 was unusual, as this occurred before Matautia had served a notice of termination of the tenancy agreement. Counsel for Di Liristi did not submit that there was a likelihood or reasonable probability of legal proceedings at the relevant time.
5. As to the second question, there is an unchallenged finding by the primary judge that the first Aargus report was prepared for the purpose of undertaking soil investigations: Judgment No 4 at [15]. I do not consider that proceedings were in the contemplation of Mr Balakrishnan or Mr Whitting (on behalf of Matautia), the persons who respectively prepared and obtained the relevant representations in the report.
6. In my view, there was no error by the primary judge in admitting the first Aargus report. It was a business record of Matautia. In addition, the file copy of the report was a business record of Aargus, and the file copies of the laboratory certificates were a business record of ASET. The previous representations contained as to the contamination found in the soil samples obtained from the imported fill on the property at the locations shown in the report, and the volume of fill which should be removed from the areas where contaminated soil was detected, were admissible under s 69 as an exception to the hearsay rule.

Weight to be given to first Aargus report

1. Turning to the question of the weight that could be given to the previous representations in the first Aargus report, Di Liristi acknowledged in his evidence that he was present at the property on 7 January 2020 when the soil samples were obtained by persons from Aargus. It is not to the point, as Di Liristi submitted, that Mr Kelly himself did not attend the property when the samples were obtained by Mr Zhang and Mr Balakrishnan. The previous representations in the first Aargus report as to the location and depth where the samples were obtained were made by a person or persons (in the business of Aargus) who may be taken to have had personal knowledge about those asserted facts, namely Mr Balakrishnan and Mr Zhang (who maintained the chain of custody record in relation to the soil samples obtained on 7 January 2020).
2. There is no dispute concerning the quality assurance/quality control measures adopted by Aargus to ensure sample integrity or the chain of custody record. In the circumstances, the weight to be given to the previous representations contained in the first Aargus report was not lessened by the absence of Mr Balakrishnan or Mr Zhang for cross-examination.
3. Nor is it to the point, as Di Liristi submitted, that Aargus did not conduct a full systematic sampling of the property, and only obtained samples from the imported fill on the property. Whether asbestos was present in other parts of the property, as Di Liristi alleged in his claim for damages arising from Matautia's alleged failures to repair and maintain the property, was a matter for him to prove, which he did not.
4. Contrary to Di Liristi's submission, the laboratory certificates from ASET identified that the asbestos detected in 6 of the 17 samples is in excess of the acceptable limit of 0.1g/kg, being 0.01 per cent. The absence of the author of those certificates for cross-examination did not lessen the weight to be given to those certificates. No deficiency in the process of analysing the soil samples was identified by Di Liristi, either at trial or in this Court.
5. Having considered the competing expert reports, his Honour accepted the first Aargus report in preference to the Geotech report. There was no error in his Honour doing so.

(2) Objection to second Aargus report

1. The second Aargus report was in reply to the Geotech report. It was not suggested that this report took the issue of contamination any further than the first Aargus report. Nevertheless, I will briefly address the objection to its admissibility.
2. The sole ground of appeal is that in Judgment No 4, the primary judge failed to refer to the requirements of UCPR, r 31.28(4) and failed to make a finding that there were "exceptional circumstances" that warranted the giving of leave for the second Aargus report to be admitted into evidence. It was further submitted that there were no exceptional circumstances that warranted the giving of leave.
3. As mentioned, no orders had been made for the service of expert reports. Accordingly, any reports were required to be served no later than 28 days before the date of the hearing: UCPR, r 31.28(1)(c). The consequence of non-compliance with this rule was that, except by leave of the Court or by consent of the parties, an expert report not served within time was not admissible: r 31.28(3)(a). The Court had a discretion to grant leave to a party to rely on an expert report not served in accordance with r 31.28 if, relevantly, there are exceptional circumstances warranting such leave: r 31.28(4). In addition, the Court may, by order, dispense with any requirement of the rules of court if satisfied that it is appropriate to do so in the circumstances of the case: Civil Procedure Act 2005 (NSW), s 14.
4. Although the primary judge did not use the words "exceptional circumstances" when admitting the second Aargus report, on a fair reading of the reasons his Honour can be taken to have considered that such circumstances were established. That is apparent from his Honour's acknowledgment (i) that both parties had served expert reports and relied on them although no directions had been made for expert evidence, (ii) that the second Aargus report was in reply to the Geotech report, and that Mr Foggett of Geotech had already given evidence, and (iii) that both parties had a fair opportunity to adduce their expert evidence and to cross-examine each other's experts: Judgment No 4 at [10], [11], [17].
5. Further and importantly, his Honour took into account that the late service of the second Aargus report occurred in circumstances where the Geotech report had also only been served (late) in February 2021: Judgment No 4 at [19]. As is apparent from the chronology recited at [13] above, the Geotech report was served 11 days late and the second Aargus report was served 14 days thereafter, which was consistent with the length of time provided in the directions made by the Court on 21 September 2020 for service of Matautia's reply evidence on the cross-claim.
6. To succeed in challenging the primary judge's discretionary decision to grant leave to Matautia to rely on the second Aargus report, it is necessary for Di Liristi to demonstrate error in the sense of House v The King (1936) 55 CLR 499 at 504-505; [1936] HCA 40. No such error has been demonstrated.

B. Damages for clean-up costs

1. Di Liristi contends that the primary judge erred in awarding damages for the cost of remediating the land because the only evidence of such costs was the two quotes which had been obtained by Matautia, which were said not to be admissible, or alternatively, to which it was said no weight should have been given. A separate ground asserting that Di Liristi was denied procedural fairness because both parties had conducted the hearing on the basis that damages would be dealt with at a later date was not pressed.
2. Di Liristi made no objection at trial to the tender of the two quotes, which were referred to at pars 54 and 55 of the Whitting affidavit and contained in the exhibit to that affidavit. Nor did Di Liristi object to par 56 of the Whitting affidavit, which contained evidence of "further costs associated with remediating" the property, such as traffic control costs and environmental consultants' costs.
3. That being the position, although the quotes were not admissible as business records of either Matautia or the entity providing the quotation as the quotes had been obtained for the purposes of the litigation (Evidence Act, s 69(3)), this Court should deal with the issue as to their admissibility on the basis that there is no objection to the quotes as hearsay. The prevailing view in this State is that the words "not admissible" in the Evidence Act, including in the hearsay rule in s 59, mean "not admissible over objection": Perish v R (2016) 92 NSWLR 161; [2016] NSWCCA 89 at [261]-[270] (Bathurst CJ, Hoeben CJ at CL, Bellew J). That leaves for consideration the question as to the weight to be given to the evidence.
4. The primary judge accepted that Matautia had proved that some of the imported fill on the property was contaminated with asbestos and that the contaminated soil was required to be removed from the property. The quote obtained from EMS was in respect of the removal of 520m3 of imported fill, as recommended in the first Aargus report, which equated to 936 tonnes, according to the EMS quote.
5. It is well-established that where damage has been proved but the evidence does not enable precise quantification of it, the Court is required to "do its best". In Paino v Paino [2008] NSWCA 276, Hodgson and McColl JJA said at [76]: There is a general principle in relation to damages that where a plaintiff has proved substantial loss but the evidence does not enable precise quantification of it, the court should "do its best": Fink v Fink [1946] HCA 54; (1946) 74 CLR 127 (at 143); State of NSW v Moss [2000] NSWCA 133; (2000) 54 NSWLR 536 (at [72]); Uszok v Henley Properties (NSW) Pty Limited [2007] NSWCA 31 (at [135]-[141]).
6. In Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 196 ALR 257, Hayne J distinguished between a case where the plaintiff cannot adduce precise evidence of what has been lost and a case where, although apparently able to do so, the plaintiff has not adduced such evidence. His Honour said at [38]: In the former kind of case it may be that estimation, if not guesswork, may be necessary in assessing the damages to be allowed. References to mere difficulty in estimating damages not relieving a court from the responsibility of estimating them as best it can may find their most apt application in cases of the former rather than the latter kind. (Citations omitted.)
7. Matautia submitted that this case falls into the former category. I agree. The primary judge was entitled to use the quotes as estimates to assess damages for the cost of remediation. The evidence of Mr Whitting established that he had provided the first Aargus report to two remediation contractors for the purpose of obtaining quotes as to the costs of complying with the clean-up notice. Di Liristi did not challenge the opinion expressed in the first Aargus report that the amount of contaminated soil that was required to be removed from the property was 520m3, nor call evidence about the costs of removal. The two quotes were some evidence, albeit slight, of the likely cost of remediation.
8. Contrary to Di Liristi's submissions, the weight to be given to the EMS quote was not significantly reduced by the fact that this quote was unsigned and addressed to Matautia's solicitor. There was no challenge to Mr Whitting's evidence as to the circumstances in which the quotes were requested. Nor is the weight to be given to the EMS quote lessened by the fact that the quote was only open for acceptance for 60 days and Matautia had not accepted the quote. The quote was some evidence of the likely cost of remediation; it is not to the point that the cost might have increased by the time of trial ten months later. Nor was it suggested that the likely costs of remediation had decreased since the date of the quote.
9. It remains to consider the submission by counsel for Di Liristi that Di Liristi's position as an unrepresented litigant affects the weight to be given to the EMS quote, in circumstances where, had objection been taken, the quotes would have been inadmissible.
10. The court's duty to unrepresented litigants is to ensure a fair trial for all parties: Hamod v New South Wales [2011] NSWCA 375 at [309]-[316] (Beazley JA, Giles and Whealy JJA agreeing). Nevertheless, it is not for the trial judge to raise and determine questions of admissibility: Harrington-Smith on behalf of The Wongatha People v State of Western Australia (No 7) (2003) 130 FCR 424; [2003] FCA 893 at [13] (Lindgren J). As observed in Bauskis v Liew [2013] NSWCA 297 at [69] (Gleeson JA, Beazley P and Barrett JA agreeing), the propositions which emerge from the authorities referred to in Hamod include: Thirdly, the duty of a trial judge to assist an unrepresented litigant does not extend to advising the litigant as to how his or her rights should be exercised. That is, it is not the function of the court to give judicial advice to, or conduct the case on behalf of, the unrepresented litigant: see Bhagwanani v Martin [1999] SASC 406; (1999) 2004 LSJS 449; Clark v State of New South Wales (No 2) [2006] NSWSC 914. See also Pollock v Hicks [2015] NSWCA 122 at [91] (Gleeson JA, Macfarlan and Emmett JJA agreeing).
11. Although some of the exchanges between Di Liristi and his Honour on 10 March 2021 suggest that Di Liristi may have been unprepared to deal with objections to the Whitting affidavit, his Honour allowed Di Liristi time to read the whole of the Whitting affidavit and make a note of paragraphs that he wanted to object to. After that had occurred, Di Liristi indicated that he had two main objections "on the two reports", which he identified as the first Aargus report and the clean-up notice issued by the Council.
12. This is not a case where a litigant in person overlooked the evidence, to which objection was taken on appeal. Di Liristi had referred to the two quotes in his opening submissions in the context of his own claim for damages against Matautia, and again when addressing objections to his affidavit of 10 June 2020 containing hearsay evidence of asbestos on the property, which was the subject of his claim for damages for the cost of "the work to remove the asbestos".
13. Reference was made in oral argument to the following exchange recorded in the transcript of 10 March 2021: HIS HONOUR: … Other than that Mr Di Liristi, I must say I do not see too much in there, so that's a euphemism. I don't see anything in there that would really be objectionable. But have you identified anything? We just need to move on Mr Di Liristi. PLAINTIFF: Yeah, I understand your Honour. I thought I would have been advised on the witness, whose the witness first so I can prepare for the witness.
14. In my view, the remark by his Honour is not to be treated as dissuading Di Liristi from objecting to the documents exhibited to Mr Whitting's affidavit, which included the two quotes to which his Honour made no reference.
15. In circumstances where there was some evidence of the cost of remediation of the property, which was not contradicted by any evidence adduced by Di Liristi, nor challenged in cross-examination, I am not persuaded that there was any error in the award of damages for the cost of remediation of the property.

C. Claim for unpaid rent

1. Di Liristi submitted that the primary judge erred in awarding damages for unpaid rent and interest up to the date of delivery of the supplementary judgment on 23 June 2021.
2. In writing, Di Liristi submitted that the effect of the declarations made by his Honour on 11 June 2021 was that the lease terminated on 6 April 2020 (when Di Liristi failed to give up possession as required by the notice of termination), and the obligation to pay future rent ceased on that date with the consequence that Matautia's remedy was an award of damages for loss of bargain (Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17 at 31 (Mason J, Wilson, Deane and Dawson JJ agreeing), 40 (Brennan J); [1985] HCA 14). Di Liristi submitted that there was no evidence to support an award of damages for loss of bargain, such as evidence of the market rental value of the property.
3. In oral argument, Di Liristi accepted that if the tenancy agreement terminated on 6 April 2020, then Di Liristi's possession of the property after that date was that of a trespasser, and Matautia had an accrued right to unpaid rent up to 6 April 2020, and thereafter a right to mesne profits. Again, Di Liristi submitted that there was no evidence to support a claim for mesne profits.

(1) Whether claim for unpaid rent or loss of bargain damages after 6 April 2020

1. The fundamental flaw in Di Liristi's argument is that it ignored the provisions of the Residential Tenancies Act which govern the termination of a residential tenancy agreement. It is not in dispute that this Act applied to the tenancy agreement between Matautia and Di Liristi.
2. For the purpose of Pt 5 of the Residential Tenancies Act, the expression "termination order" is defined in s 80 to mean an order terminating a residential tenancy agreement, together with an order for possession of the residential premises.
3. The Residential Tenancies Act deals with the circumstances of termination of residential tenancies in s 81(1), which provides that a residential tenancy agreement terminates only in the circumstances set out in the Act, namely:

• if a landlord or tenant gives a termination notice in accordance with the Act and the tenant gives vacant possession of the residential premises (s 81(2));
• if the Tribunal makes an order terminating the agreement under the Act (s 81(3)); and
• if any of the specified circumstances referred to in s 81(4) occurs, which include if the tenant abandons the premises (sub-sec (4)(d)) or if the tenant gives up possession of the residential premises with the landlord's consent, whether or not that consent is subsequently withdrawn (sub-sec (4)(e)).

1. Consistent with the definition of "termination order", s 83(1) provides that if the Tribunal makes an order terminating the residential tenancy agreement under the Act, it must also make an order for possession of the residential premises specifying the day on which the order takes effect or took effect. Under s 87(4), the Tribunal, on the application of the landlord, may make a termination order if it is satisfied that: (a) the tenant has breached the residential tenancy agreement, and (b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement, and (c) the termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice.
2. It is not in dispute that at the time of the hearing below, the Tribunal had not made an order terminating the tenancy agreement. Accordingly, s 81(3) was not engaged. Nevertheless, Di Liristi contended that the tenancy agreement terminated on 6 April 2020. According to the submission, following referral of the proceedings below to the Tribunal, the Tribunal will make an order that the tenancy agreement was terminated conformably with the declaration in order (3) made on 11 June 2021 (see [17] above). There are several difficulties with this submission.
3. First, the submission incorrectly assumed that the primary judge made a declaration that the tenancy agreement terminated on 6 April 2020. That is not so. The terms of the declaration were that Matautia had validly terminated the lease. The declaration involved a rejection of Di Liristi's case that the notice of termination was invalid. The declaration did not purport to determine the time at which the notice of termination took effect. That was a matter for the Tribunal exercising its powers under s 81.
4. Second, it is fanciful to suggest, as counsel for Di Liristi submitted, that in the circumstances of this case the Tribunal would make a termination order to take effect on a past date (6 April 2020), when such an order could never be complied with by Di Liristi, as he was and has remained in possession since 6 April 2020. Matautia had an accrued right to liquidated damages for unpaid rent of $600 per week from 11 September 2019 to the date of judgment on 23 June 2021, together with interest thereon. There was no error in the award of damages for unpaid rent up to the date of judgment.
5. If, contrary to the above conclusion, the tenancy agreement is to be treated as having terminated on 6 April 2020, then Di Liristi became a trespasser when he failed to vacate the property on that date. On this hypothesis, Matautia would be entitled to unpaid rent up to 6 April 2020 and mesne profits thereafter to the date of judgment. Mesne profits are awarded as damages for the use of the plaintiff's land by the defendant during the period of trespass; that is, damages for the rent that would have been obtained on a re-letting but for the tenant's continued occupation: see the discussion in Sydney Local Health District v Macquarie International Health Clinic Pty Ltd [2020] NSWCA 274 at [79]-[93]. If it was necessary to assess mesne profits for the period from 7 April 2020 to the date of judgment, the best evidence of the market rent that could have been obtained but for Di Liristi's continued occupation is the rent payable under the tenancy agreement. For the avoidance of doubt, I reiterate that this contingent finding does not arise because, contrary to Di Liristi's submissions, the tenancy agreement had not terminated on 6 April 2020.

(2) Whether set-off or deduction against rent

1. Di Liristi challenged the finding that he was not entitled to set-off against unpaid rent amounts totalling $4,546.50 relying upon Special Condition 4(a)-(d) of the tenancy agreement: at J [206]. For the purposes of this submission, it is sufficient to reproduce Special Condition 4(a), which provides: 4. The Landlord and Tenants agree as follows: (a) The Tenant will pay for the Air Conditioning and Heating Unit at a cost of $2,950.00 as per Invoice #190301003 and will be taken of (sic) the rent until completely paid. (Emphasis added.) …
2. Di Liristi says that he is entitled to set-off the amount of $4,546.50 against the unpaid rent (up to 6 April 2020), notwithstanding, as the primary judge found (at J [69]), that Di Liristi had not paid for any repairs the subject of the four invoices referred to in Special Condition 4(a)-(d).

Consideration

1. The entitlement of Di Liristi to set-off or deduct from the rent certain costs totalling $4,546.50 was conditional upon payment by Di Liristi of those costs. That is plain from the use of the language of the executory promise "will pay". As the payment obligation of Di Liristi was not satisfied, there is no entitlement to a set-off or deduction from the unpaid rent, as claimed by Di Liristi.
2. The alternative construction advanced by Di Liristi, that he was entitled to a set-off or deduction from rent without having first paid the cost of the specified repairs and other items, involves a commercial nonsense. The obvious purpose of the Special Condition was that if Di Liristi incurred specified costs in relation to the property, he would receive a reduction in the rent. There was no error by the primary judge in rejecting Di Liristi's claim for a set-off or deduction from unpaid rent.

Conclusion

1. The appeal has failed and there is no reason why costs should not follow the event: UCPR, r 42.1.
2. I propose the following orders: 1. Appeal dismissed. 2. Appellant to pay the respondents' costs.
3. BRERETON JA: I agree with Gleeson JA.

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: 17 December 2021