Dokas v Gallagher

Notice of Appeal and hearing

1. There is an issue about whether the appeal was lodged out of time, being more than 14 days after the date notice of decision was given to the tenants, and if so, how late it was lodged. The tenants contend in section 2 of the Notice of Appeal that the decision was received on "10 Apr & 27 Mar 2024". By this we understand that the tenants say: 1. the decision in the landlord's application, which was sent by the Tribunal to a mailing address, was received on 10 April; and 2. the decision in the tenants' application, which was sent by email on 27 March 2024, was received on that date.
2. If this is correct, in the case of the landlord's application, the time by which the appeal was to be lodged was 24 April 2024. In the case of the tenants' application, the time by which the appeal was to be lodged was 11 April 2024.
3. An extension of time is sought in which to lodge the Notice of Appeal.
4. Notwithstanding the Notice of Appeal references both the decision in both the landlord's application and the tenants' application, the only orders challenged in the Notice of Appeal, as recorded in section 5A, were the orders made in connection with the landlord's application.
5. The grounds of appeal as stated in section 5B of the Notice of Appeal are: ERRORS OF LAW: In summary, the member made an error of law: 1) By misapplying the law to the facts that the Member found by persuading us to withdraw our application; 2) By relying on a written submission of allegations made by the managing agent in relation to the rent increase despite the evidence having no probative value; 3) By failing to provide procedural fairness; 4) By interpreting the Acts (referred to in our cross-application) incorrectly, and by failing to take into account the factors stipulated by the statute; 5) By failing to take into account relevant (i.e., mandatory) considerations; 6) By identifying the wrong issue and asking the wrong question; 7) By taking into account an irrelevant consideration; 8) Because a wrong principle of law had been applied; 9) Because there was a failure to afford procedural fairness; 10) By failing to provide proper reasons justifying his orders; 11) By failing to give an adequate explanation of its reasoning process; 12) Because the power in Section 44(4)(5) was not engaged (and because there was no evidence to support a finding that the rent was reasonable / excessive); 13) Because the decision was so unreasonable that no reasonable decision-maker would make it; 14) By ignoring the fact that the Australian Consumer Law (the ACL) which is legislated in Schedule 2 of the Competition and Consumer Act 2010 (Cth), along with the National Construction Code (NCC) 2022, Civil Liability Act 2002 (NSW), Corporations Act 2001 (NSW), and the Crimes Act 1900 (NSW) applied in assessing whether or not the rent increase / rent payable were excessive.
6. In section 5C of the Notice of Appeal, the orders sought were as follows: Due to the urgent nature of the appeal, we: 1) require an interim stay; 2) suspension of possession orders under Section 114 of the Residential Tenancies Act 2010 (NSW); and 3) request the same orders in our cross-application filed with NCAT on 19 February 2024, including but not limited to:

• DISMISS RENT INCREASE: Dismiss the Landlord's rent increase dated 2 June 2023 on the grounds that the rent increase violates inter alia: Section 44(5)(a)(b)(c)(d)(e)(f)(h) of the Residential Tenancies Act 2010 (NSW), and that an order for "rent payable" was sought in our cross-application under Section 44(1)(a)(b) (Tenant's remedies for excessive rent).
• PACKING AND MOVING COSTS (see Bhandari v Laming [2015] NSWCATAP 224 at [64.] -[66.])
• JURISDICTIONAL LIMIT OF NCAT. Due to the jurisdictional limit of NCAT ($15,000), transfer the proceedings (and evidence for Orders sought) to the Local Court in order to order the Landlord: 1) Refund all rent payable (eg in the form of compensation, restitution, refund) for the major portion (%) of the premises due to being unfit for human habitation (prior to and since commencement of lease); in a state of disrepair / non-compliance with inter alia: National Construction Code (NCC) 2022, including Australian standards; both the rent payable and rent increase being unreasonable (excessive) and unconscionable; 2) Damage to property due to failure to carry our "urgent" repair; 3) Return money for all water charges we have been forced to pay in contravention of the Residential Tenancies Act 2010 (NSW); and 3) Order compensation for my father's public liability injury claim due to the Landlord and Wilsons negligence, d) and injury to feelings, distress, disappointment and inconvenience which constitute impairments to our mental health, and amount to personal injury because they are caught by the definition of personal injury in the Civil Liability Act 2002 (NSW). NOTE: We have paid between $160 and $165/ week more in rent payable than the three previous tenants, which was initially $560 / week rent payable (30 July 2022-9 August 2024) before the rent increase of $670 / week (issued on 2 June 2023, taking effect on 10 August 2024). The preexisting rent / week paid by previous tenants are as follows (1 Oct 2016 = $395 / week; May 2019 = $400; 18 Dec 2019 = $365). Numerous grounds for refunding the rent payable are listed in our Cross-Application (see Pages 27-44 of our application), such as inter alia: the majority of the premises (as a %) existing in even worse condition (not in a reasonable state) than the previous tenants leases, and the premises being unfit for habitation.
• DURESS / UNCONSIONABLE: The condition / term (provision) of the contract to increase the root from $560 / week to $670/ week was made under DURESS, after the Landlord was appraised of our family situation, frail health and mental state (e.g. burn out, physical and psychological harm). Accordingly, duress invalidates the unconscionable rent increase (making it VOID).
• NATIONAL CONSTRUCTION CODE (NCC) 2022: Advertising the 2-bedroom Duplex Villa as a 3-bedroom "House" constitutes financial advantage / disadvantage for financial gain, and fraud (which are criminal offences under the Crimes Act 1900 (NSW). The third room is NOT habitable as per the National Construction Code (NC) 2022; and the rent was increased by $165 for a portion of the dwelling which was / is NOT habitable. Moreover, numerous building defects rendered the property unfit for human habitation.

1. The tenants also seek leave to appeal on the basis the decision was not fair and equitable, was against the weight of evidence, or that there was significantly new evidence that was not reasonably available at the time of the original hearing.
2. As to why the decision was not fair and equitable, inter-alia, the tenants say: "since the Member dismissed our counterclaims (when there was no legal grounds to do so) along with the orders we were seeking, as a tactic to abdicate himself of his duty we were stripped of our legal avenues to establish a defence to the landlord's application." which the Member thought would allow him to solely consider…"
3. As to why the decision was against the weight of evidence, the appellant refers to various evidence including: "copies of photographs evidencing the dilapidated state of the residential premises due to numerous violations of inter-alia; the Residential Tenancies Act 2010 (NSW) and of the National Construction Code (NCC) 2022 by the Landlord and Wilsons [being the landlord's agent]".
4. In relation to new evidence, the tenants rely on an undated building report prepared by Mr Elie Farah of Effective Building and Consultancy.
5. At this point we note this new evidence should not be accepted in this appeal as it was evidence that was reasonably available at the original hearing as that expression is explained in Al-Daouk v Mr Pine t/as Furnco Bankstown [2015] NSWCATAP 111 at [19] and following.
6. The landlord filed a reply to appeal. In short, the landlord said the Tribunal's decision was correct and the appeal should be dismissed. In saying so, the landlord said that the tenants' application was withdrawn and therefore dismissed. Otherwise, the Tribunal considered each of the arguments relevant to the landlord's application and properly terminated the agreement.
7. As to the appeal being out of time, the landlords says the appeal was lodged "a full 30 days later and a full 2 days after the tenants were supposed to be out of the property", the landlord contending that notice of decision was received by the tenants on 27 March 2024.
8. As to service of the termination orders and the tenants' contention that they did not know about the orders until received in April, the landlords says that the termination orders were: "printed out on 27th March and dropped off to the tenant mailbox by one of our property managers Kylie Roozendaal. I have a video of this with a date and time stamp."
9. Section 223(1)(a)(iii) of the Residential Tenancies Act 2010 (NSW) (RT Act) permits service by leaving a document in a mailbox.
10. Following the lodgement of the appeal, the Appeal Panel made an order suspending the order for possession on 26 April 2024 (stay order). At the call-over on 8 May 2024, the stay order was extended until "further orders or finalisation of the appeal, whichever is earlier". The Tribunal also made directions concerning the filing and service of evidence and submissions in support of their respective positions.

Matters subsequent to the hearing

1. At the conclusion of the appeal we made the following orders: 1 The appellants are to provide to the respondent a copy of the email to the Tribunal dated 19 June 2024 by 7:00 PM on 20 June 2024. 2 On or before 26 June 2024 the respondent is to file and serve a short submission (not more than 10 pages) responding to the matters raised in that email dated 19 June 2024 and/or whether it should be permitted to be relied on by the appellants in this appeal. 3 The decision is reserved.
2. Orders 1 and 2 were necessary because the appellant had forwarded to the Tribunal an email the day before the hearing, and without leave, being further submissions dated 19 June 2024. This email had not been copied to the respondent, a matter which only became apparent towards the end of the hearing of the appeal.
3. On 21 June 2024, the Tribunal also received submissions from the landlord pursuant to Order 2. That document provided a response to the further submissions contained in the tenants' email dated 19 June 2024.
4. While the landlord said the tenants should not be permitted to rely on their email dated 19 June 2024, the tenants' evidence and submissions being due 29 May 2024, no real prejudice was identified in respect of the late delivery of the material on 19 June 2024. Further, despite the objection raised, the landlord provided a brief response to this additional material.
5. In the absence of any relevant prejudice, and having regard to the fact that the tenants' submissions were available to the Appeal Panel and the parties at the hearing on 20 June 2024 and that the landlord has now had a chance to respond, we propose to allow this material and the landlord's submissions in response provided 24 June 2024.
6. Finally, despite no leave been granted, the appellants provided further submissions and documents to the Appeal Panel in an email dated 24 June 2024. As they were provided without leave and after the conclusion of the hearing of the appeal, we do not propose to have regard to this material.

Consideration

1. There is a right of appeal on a question of law, otherwise leave to appeal is required: s 80(2)(b) NCAT Act. In connection with appeals from decisions of the Consumer and Commercial Division (of which this appeal is one) leave to appeal may only be granted if an appellant establishes they may have suffered a substantial miscarriage of justice because the decision was not fair and equitable, against the weight of evidence or there was significant new evidence that was not reasonably available at the time of the original hearing: Sch 4 cl 12(1) NCAT Act.
2. The principles concerning the grant pf leave to appeal are set out in the decision of Collins v Urban [2014] NSWCATAP 17 (Collins).

Extension of time

1. The appeal was lodged out of time. Consequently, the first question to be determined is whether an extension of time should be granted in connection with the lodgement of the appeal.
2. Section 41 of the NCAT Act permits the Appeal Panel to extend time.
3. The principles applicable when considering an extension of time are set out in the decision of Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 (Jackson). At [22] the Appeal Panel said: 22 The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include: (1)The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant - Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38]; (2)The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision - Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success - Jackamarra at [7]; (3)Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: (a)The length of the delay; (b)The reason for the delay; (c)The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and (d)The extent of any prejudice suffered by the respondent (to the appeal), - Tomko v Palasty (No 2) (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and (4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59].
4. Rule 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW) (Rules) provides that unless the Tribunal extends time under s 41 of the NCAT Act, the time to lodge an appeal: (b) in the case of an internal appeal against a decision made in residential proceedings - within 14 days from the day on which the appellant was notified of the decision or given reasons for the decision (whichever is the later),
5. The present proceedings are residential proceedings because they are brought under the RT Act): r 3(1) Rules.

Evidence regarding service of the termination orders

1. As set out above, there were competing positions about how and when notice of the Tribunal's decision and reasons was provided to the tenants. The differences are relevant in determining the extension of time question. This is because notice of the termination orders and reasons were given to the tenants in a number of ways.
2. At the hearing of the appeal, each of the tenants and the agent for the landlord (Mr Greg Quilkey/agent), were sworn or affirmed and gave evidence to the Appeal Panel about these matters. In doing so, opportunity was provided for cross examination of which each party availed themselves. We will return to this evidence below.
3. As to the means by which notice may be given, ss 223(1)(a)(iii)-(v) of the RT Act relevantly provides: 223 Service of notices and other documents (1) A notice or other document that is authorised or required by this Act or the regulations or a residential tenancy agreement to be given to or served on any person may be given or served by - (a) in the case of a natural person - … (iii) delivering it in an envelope addressed to the person and leaving it in a mailbox at the person's residential or business address, or (iv) sending it by post to the address specified by the person for the giving or service of documents or, if no such address is specified, the residential or business address of the person last known to the person giving or serving the document, or (v) sending it to an email address specified by the person for the service of documents of that kind, or
4. The evidence concerning how service of the orders was made on the tenants and when the appeal was filed is as follows.
5. In the case of the dismissal order, the notice of decision was addressed to the tenants by email. It was sent by the Tribunal on 27 March 2024.The tenants do not suggest they did not receive this notice on that date, although their evidence about which notice was received by email was confused.
6. In the case of the termination order the following evidence was provided.
7. The termination orders (which included the reasons) were sent by the Tribunal to a postal address on 27 March 2024.
8. Rule 13(4)(a) of the Rules provides: (4) When notice or document taken to be served, given or lodged Unless the contrary is proved, the time at which a notice or document is taken to be served, given or lodged is - 1. (a) in the case of a copy of a notice or document that is posted - at the end of the seventh working day after the date on which the notice or document was posted to the person, or
9. The tenants' evidence is that the termination orders posted by the Tribunal on 27 March 2024 were not in fact received by post until 10 April 2024.
10. The tenants otherwise say: 1. That they lodged the Notice of Appeal by email on 24 April 2024 and sent the Notice of Appeal by express post. 2. They could not produce a copy of any email dated 24 April 2024 when requested by the Appeal Panel. However, upon viewing the appeal file, they agreed they sent an email dated 26 April 2024 to the Tribunal which did attach their Notice of Appeal.
11. The evidence of the landlord's agent, Mr Quilkey was to the following effect: 1. He received a copy of the termination orders on 27 March 2024. 2. Although not directed to do so, he printed the copy of the orders and placed it in an envelope addressed to the tenants and directed a member of his staff, Ms Roozendaal, to place it in the mailbox of the residential premises on 27 March 2024. 3. A video was produced to the Appeal Panel of Ms Roozendaal placing the envelope in the mailbox. This video was shown to the tenants and the Appeal Panel in the course of the agent's evidence.
12. In response to this evidence, the tenants agreed the mailbox was that of their residential premises. However, they said they did not see the letter and were unable to explain what had happened to it, other than perhaps somebody may have removed it from the mailbox.
13. We note the Notice of Appeal on the Tribunal file is date stamped 26 April 2024, not 24 April 2024. We also note that the Notice of Appeal is dated 18 April 2024 and is "digitally signed" by Tobias Dokas, that digital signature bearing the following date and time mark: Date: 2024.04.18 21:42:49+10'00'.

Findings regarding the termination orders

1. Having regard to r 13(4) of the Rules, we are satisfied that notice of the termination orders sent by the Tribunal were given to the appellants on 10 April 2024, not 7 business days after they were posted. This was the date which they say in their evidence this notice was in fact received.
2. However, notice of the termination orders was also given to the appellant by the landlord's agent delivering a copy to the mailbox on 27 March 2024 as permitted by s 223(1)(a)(iii) of the RT Act. Since it is the fact of giving notice, not the person who gives notice, which is the critical matter in determining when service is affected, we are satisfied that 27 March 2024 is the date service was affected.
3. Consequently, the Notice of Appeal was required to be lodged by 10 April 2024.
4. Notwithstanding the assertion by the appellants that the Notice of Appeal was sent to the Tribunal by email on 24 April 2024, there is no evidence to support this claim. To the contrary, the evidence of the email to the Tribunal dated 26 April 2024 leads us to the conclusion that this was the date on which the application was made.
5. It follows that the appeal was lodged 16 days out of time.
6. Having regard to the 14 day time limit, this delay of 16 days is significant, particularly as there is no satisfactory evidence explaining what happened to the notice which was placed in the mailbox, a fact evidenced by the video presented to the Tribunal by the landlord's agent.
7. Consistent with the approach in Jackson, it is therefore necessary to examine the merits of the appeal in greater detail in determining whether time should be extended.
8. It is convenient to deal with the merits of appeal by reference to the Issues. We will do so under the following headings: 1. Was the notice increasing the rent, being the notice given on 2 June 2023, invalid? 2. Was the rent excessive because of the state of the premises and should the rent have been reduced? 3. Was the property uninhabitable? and 4. Was the landlord entitled to increase the rent on the basis the parties had entered a residential tenancy agreement for 24 months on 31 July 2022 and therefore the rent could not be increased during this period? 5. Was the notice of termination dated 4 January 2024 retaliatory?
9. In considering these matters we note that the tenants were in arrears because they had failed to pay that part of the rent representing the increase which the landlords said it had lawfully made pursuant to notices dated 2 June 2023 and 14 September 2023. This first notice (2 June) purported to increase the rent on and from 10 August 2023 from $560.00 per week to $2954.76 per month (approximately $680 per week). The second notice (14 September) purported to "drop the rent by $10" per week, backdated to 10 August 2023.

Was the notice increasing the rent, being the notice given on 2 June 2023, invalid?

1. Under the heading "Dismiss Rent Increase" in their submissions dated 18 April 2024, at page 13, in a document entitled "Grounds and particulars of 'Notice of Appeal' and 'Application for Stay of Originals Decision Pending Appeal' (Summary)" the appellant identified the challenge to the validity of the notice to increase rent in the following terms: Dismiss the Landlord's rent increase dated 2 June 2023 on the grounds that the rent increase violates inter alia: Section 44(5)(a)(b)(c)(d)(e)(f)(h) of the Residential Tenancies Act 2010 (NSW), and that an order for the "rent payable" was sought in our cross-application under Section 44(1)(a)(b) (Tenant's remedies for excessive rent).
2. The scope of the challenge on this matter is confirmed by a second document filed in this appeal by the appellants entitled "Grounds and Particulars of 'Notice of Appeal' and 'Application for Stay of Originals Decision Pending Appeal' (Long Version)" ("Long Version"), dated 18 April 2024: at page 119.
3. The Tribunal considered this challenge in the context of the requirements of s 41 - Rent increases and s 44 - Tenant's remedies for excessive rent of the RT Act. The Tribunal rejected both bases of challenge.
4. As to compliance with s 41, the Tribunal said: In my view, the Landlord has complied with section 41(1)(a) of the RTA by giving the Tenants letter dated 2 June 2023. The Tenants submitted that the letter referred to an erroneous section of the RTA, being section 5 which was repealed as of the date of the letter. In my view, the reference to section 5 of the RTA does not invalidate the letter, it is clear from the contents of the letter that the Landlord is providing notice to the Tenants in respect of a rent increase. Further, the Landlord has complied with section 41(1)(b) of the RTA, given the letter gave at least 60 days' notice before the increased rent is payable.
5. Section 41 of the RT Act provides: 41 Rent increases (1) The rent payable under a residential tenancy agreement may be increased only if - (a) the tenant is given a written notice by the landlord or the landlord's agent specifying the increased rent and the day from which it is payable, and (b) the notice is given at least 60 days before the increased rent is payable. (1A) Subsection (1) does not apply to a fixed term agreement for a fixed term of less than 2 years that specifies the date on which, and the amount by which, the rent payable under that agreement will be increased. This subsection does not affect the operation of subsection (2) in relation to the renewal of a fixed term agreement. (1B) The rent payable under a periodic agreement may not be increased more than once in any period of 12 months. (2) This section extends to an increase in the rent payable under a residential tenancy agreement on renewal of the agreement as if the increase were an increase during the term of the agreement. Note - Notice of a rent increase on renewal is required under subsection (1) before the lease is renewed. (3) A rent increase is not payable by a tenant unless the rent is increased in accordance with this section or the rent is increased by the Tribunal. (4) The residential tenancy agreement is varied to specify the increased rent from the date the rent is increased in accordance with this section. (5) Notice of a rent increase must be given by a landlord or landlord's agent in accordance with this section even if details of the rent increase are set out in the residential tenancy agreement. (6) Notice of a rent increase may be cancelled or varied (so as to reduce the increase) by a subsequent written notice given to the tenant by or on behalf of the landlord. Any such later notice takes effect from the date on which the earlier notice was to take effect. (7) Notice of a rent increase is not required to be given by a landlord or landlord's agent if the increase arises because of the end of, or a reduction in, a rent reduction. (8) Subsections (1)-(7) are terms of every residential tenancy agreement.
6. As noted above, the notice to increase rent was given by the landlord in a notice dated 2 June 2023 (June notice), prior to the expiry of the fixed term of the agreement which was 28 July 2023. The correspondence containing the notice stated: Regarding: Rent increase [address]. The Landlord hereby provides notice to increase the rent of this property, in accordance with Section 5 of the Residential Tenancies Act 2010. Taking into account increased costs to the Landlord and current rent paid for comparable properties in the area, we advise that from 10/08/2023 your rent increases to $2,954.76 Monthly. For rent payments made by DEFT, please note that your debit will increase to reflect the new rent amount. This will take effect once your rent is paid at the current rate up to the increase date, and may actually occur prior to the date of the increase. This is due to your lease requiring rent to be paid in advance. The Landlord also offers to renew the lease for a further 26 weeks. Please contact this office to confirm your acceptance of this offer to allow us to prepare the lease documentation for your signature. If you have any questions in this matter, please contact me directly on ##
7. The June notice specified the amount of the increased rent and the day from which it was payable. The notice was given "at least 60 days before the increased rent is payable". It included an offer to "renew the lease for a further 26 weeks".
8. In our view, the requirements for the giving of notice were satisfied and, by reason of subs 41(4) and (8), the June notice was effective to vary the agreement so that on and from 10 August 2023 rent was increased to an amount of $2,954.76 per month.
9. We will return below to the question of whether the offer to renew was accepted and, if so, on what terms.
10. Subsequent to the June notice, the landlord issued a further notice contained in an email to the tenants dated 14 September 2023 (Landlord's September email). This email stated: Hi Lazarus and Tobias, Hope this email finds you both well. Just touching base today about a few things:

• Maintenance - it is my understanding now from your previous email and the last routine inspection that all maintenance is up to date - bar the following:
• Emu Pest Control - wanting access to the house to check the rat situation
• Electrician - faulty power points
• Trees - the owner has arranged for the trees to be trimmed back instead of being removed - this is to be completed on 15/09/2023. I believe they have contacted you regarding this
• Price Increase - the owners have discussed what you put forward in your previous email and they are willing to drop the rent by $10. They wanted me to remind you that you previously offered to pay more. This will be back dated from 10/08/2023.
• Fireplace - the owners also wanted me to remind you that as per the ingoing condition report the fireplace was put down as non functional, they have asked if you could please discontinue to use it
• Rent Payment - Your latest rental payment has dishonoured. I can see that you have begun to use the Mepay app. Please let me know if this is how you would like to pay your rent going forward and I will stop the direct deposit Thanks, Kylie

1. The effect of the notice under the heading "Price Increase" was to reduce the rent by $10. In this regard it is not suggested by either party that the reference to $10 was other than a reference to $10 per week. Such notice was to take effect on the same date as the June notice was to take effect, namely 10 August 2023. Section 41(6) of the RT Act permits this to occur and no error is shown in connection with the Tribunal's decision on this issue.
2. Consequently, the Tribunal was correct in its findings concerning the rent payable in consequence of the notices issued.

Was the rent excessive because of the state of the premises and should the rent have been reduced?

1. This challenge relates to s 44 of the RTA. That section provides: 44 Tenant's remedies for excessive rent (1) Excessive rent orders The Tribunal may, on the application of a tenant, make any of the following orders - (a) an order that a rent increase under an existing or proposed residential tenancy agreement is excessive and that, from a specified day, the rent for residential premises must not exceed a specified amount, (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. (2) Time limit for excessive rent increase applications An application for an order that a rent increase is excessive must be made within the period prescribed by the regulations after notice of the increase is given. (3) Applications on withdrawal of goods or services A tenant may, before the end of a tenancy, make an application that the rent is excessive, having regard to the reduction or withdrawal of any goods, services or facilities provided with the residential premises, even if those goods, services or facilities were provided under a separate or a previous contract, agreement or arrangement. (4) Determination of excessive rent For the purposes of making an order under this section, the Tribunal may declare that amounts payable under a contract, agreement or arrangement under which goods, services or facilities are provided to the tenant are rent. (5) The Tribunal may have regard to the following in determining whether a rent increase or rent is excessive - (a) the general market level of rents for comparable premises in the locality or a similar locality, (b) the landlord's outgoings under the residential tenancy agreement or proposed agreement, (c) any fittings, appliances or other goods, services or facilities provided with the residential premises, (d) the state of repair of the residential premises, (e) the accommodation and amenities provided in the residential premises, (f) any work done to the residential premises by or on behalf of the tenant, (g) when the last increase occurred, (h) any other matter it considers relevant (other than the income of the tenant or the tenant's ability to afford the rent increase or rent). (6) Effect of excessive rent order An order by the Tribunal specifying a maximum amount of rent - (a) has effect for the period (of not more than 12 months) specified by the Tribunal, and (b) binds only the landlord and tenant under the residential tenancy agreement or proposed residential tenancy agreement under which the rent is payable. Note - A tenant under a social housing tenancy agreement may also apply for an order that rent is excessive if a rent rebate is cancelled (see section 141(1)).
2. Of that challenge, the Tribunal said: The Tenants further argued at the hearing that the rent increase is excessive because, amongst other things: • the Premises is not a 3 bedroom house as advertised, but is a 2 bedroom villa; • the Premises was previously leased for $395.00 per week; • any increase in rent should be consistent with the relevant increase in the consumer price index; and • the third bedroom in the Premises is uninhabitable because it is lacking in ventilation, lighting, and does not meet the minimum floor space under relevant industry codes. Unfortunately, I do not accept any of the above arguments as a good argument which entitles the Tenants to withhold rent from 10 August 2023 until now. If the Tenants are dissatisfied in relation to the extent of the Landlord's rent increase, the correct course of action is not to withhold rent, but the RTA provides the Tenants with a remedy under section 44(1)(a) of the RTA, to bring an application for the Tribunal to make an order that the rent increase is excessive and that, from a specified day, the rent for residential premises must not exceed a specified amount. According to reg 39 of the Residential Tenancies Regulation 2019 (NSW), such an application must be brought within 30 days after the notice of the increase is given. No such application was made by the Tenants. Even if the Tenant's defence at today's hearing can be regarded as the Tenant's application under section 44(1)(a) of the RTA, the application is significantly out of time. Despite the Tribunal having the power under section 41 of the Civil and Administrative Tribunal Act 2014 (NSW) to extend time, I would decline to exercise my unfettered discretion to extend time in this instance, given first, the significant delay that has occurred; secondly, the only reason that have been proffered by the Tenants at the hearing for the delay is simply that the parties were in protracted negotiations in relation to the rent increase, and thirdly, in my view, I don't think the Tenants have a fairly arguable case. These are relevant factors that I am required to consider according to Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [18].
3. An application under s 44(1)(a) that a rent increase is excessive must be brought within 30 days of the date notice is given: see s 44(2) and reg 39(1) of the Residential Tenancies Regulation 2019 (NSW) (Regulation).
4. Of their delay, the tenants said in the Summary at p 25: Reasons for Delay 81 A summary of relevant events since commencing our lease are available on Pages 14-23 of our Cross-Application (before the hearing). 82 Firstly, for numerous reasons, at the time of the rent increase we did not apply to NCAT for an order finding the rent "excessive" as we attempted to amicably communicate with the Landlord to bring the increase into accord with rent paid for comparable properties in Patonga NSW 2256 and surrounding suburbs. Furthermore, the landlord knew fully well that we were not well enough to apply to NCAT for an excessive rent increase order. 83 Secondly, at the time we were not aware we were being deceived. Only after the landlord applied to NCAT for an order due to supposed "rental arrears", when conducting research about the property (including comparable premises), in February 2024 we learnt that we had actually been deceived since our lease commenced on 30 July 2022. The rent payable since commencing the fixed-term of our lease on 30 July 2022 was between $160 and 165 higher than the previous three tenants, which is well beyond unreasonable. The reasons why the rent payable was misleading, deceptive and unconscionable is briefly described in this document. 84 Thirdly, alleging that Wilsons had taken into account current rent paid for comparable properties in the area is false and misleading. 85 Fourthly, for a rent increase to be enforceable (if challenged) it must be "reasonable". To no avail, despite explaining that the rent increase is unreasonable and excessive (see below for dates), not one shred of evidence was ever supplied by the Landlord or Wilsons (prior to, during or after the proceedings) to support their contention that the rent is reasonable. In fact, the Landlord and Wilsons deliberately avoided responding to our concerns about the unreasonable and excessive rent increase expressed in our letters on:

• 24 July 2023 (ANNEXURE 23);
• 7 August 2023 (ANNEXURES 25, 25.1);
• 12 December 2023 (ANNEXURES 29, PDF attached to the previous annexure was not attached in our evidence since it was attached to their evidence - however, they withdrew their 645-page bundle of documents received on 4 March 2024);
• 17 January 2024 (ANNEXURES 29.1, 36, 36.1, 36.2, 36.3, 36.4).

1. As noted above, the Tribunal found the application under s 44(1)(a) was out of time. While the Tribunal had power to extend time under s 41 of the NCAT Act, it declined to do so in the exercise of its discretion. The Tribunal was correct in its analysis concerning time, the tenants' application was not lodged until 19 February 2024, more than 8 months after the June notice had been given and 5 months after the Landlord's September email was sent.
2. No submissions of have been made that would demonstrate an error of the type in House v The King (1936) 55 CLR 499; [1936] HCA 40 or that would warrant our intervention in this appeal.
3. The reasons proffered in the Summary, set out above, do not lead to a different conclusion. Rather, the landlord had engaged in discussions with the tenants which led to the rent reduction in the September email. Consequently, rent was fixed at the reduced amount from 10 August 2023.
4. As to the suggestion the tenants were deceived, these allegations are without substance or support from any evidence. Such assertions should not have been made.
5. The tenants also say the Tribunal failed to deal with their application under s 44(1)(b) of the RT Act. The time to bring such applications, which relate to the withdrawal of goods and services, can be brought at any time "before the end of a tenancy": see s 44(3) RT Act.
6. As noted above, the Tribunal's decision in relation to the defence raised under s 44(1) appears limited to a consideration of s 44(1)(a). If so, this would be a failure to exercise jurisdiction in connection with the challenge under s 44(1)(b).
7. In saying so, we note that the Tribunal considered the claim that the rent was excessive having regard to the following matters raised by the tenants: 1. the property was a 2 bedroom villa not a 3 bedroom house; 2. the premises had previously been leased for $395 per week, 3. any increase should be consistent with the consumer price index; and 4. that the "third bedroom in the Premises is uninhabitable because it is lacking in ventilation, lighting and does not meet the minimum floor space under relevant industry codes".
8. Of these matters, the Tribunal concluded that the tenants did not have a "fairly arguable case".
9. On this aspect of the appeal, the tenants said in the "Summary" at pp 38-39: WAS THERE A REDUCTION AND WITHDRAWAL OF FACILITIES? YES 130 However, as a consequence of the following three factors (based on case-law), had the Member properly applied the law (both statutory and common law) regarding the premises being unfit for habitation, and the unreasonable state of disrepair (there are overlap between the two), 50% of the rent payable should have been refunded (bearing in mind a plethora of other considerations and defects not mentioned herein which when considered well exceeds "50%"): the third room not being a bedroom (not habitable according to the Residential Tenancies Act 2010 (NSW) and the National Construction Code (NCC) 2022; the Duplex Villa not being a "House"; and "facilities" (such as upper-level and lower-ground level decks with views of Patonga Beach, Brisbane Water National Park, and Hawkesbury River) being in a dilapidated state (as well as posing risks to health and safety). However, this could not have come about since our claims exceed the jurisdictional limit of NCAT ($15,000). 131 Regarding just one of the prementioned examples among a plethora of other facts that demonstrate the state of disrepair (dilapidation) of the premises, I draw attention to the deck located on the upper level, which has never been compliant with the National Construction Code (NCC) 2022, and remains in a derelict state. Factoring in the value of the deck on the rent payable according to Campbell v Fazzolari, [2022] NSWCATCD 44 at [15.-20.] under heading "Withdrawal of facilities", "a reduction in rent of 30%" due to the reduction in the facility (deck) would have effectively nullified the Landlord's rent increase as of 2 June 2022 .

Was the property uninhabitable?

1. For the reasons stated above, we do not accept the tenants' contention the property was uninhabitable.
2. As such, the claim that rent should be reduced is rejected.

Was the landlord entitled to increase the rent on the basis the parties had entered a residential tenancy agreement for 24 months on 31 July 2022 and therefore the rent could not be increased during this period?

1. The tenants say the rent increase was invalid due because they had entered an agreement for a 24 month term. This claim was made despite the written agreement dated 22 July 2022 which they signed.
2. The tenants' contentions on this issue are found that paragraphs 50-55 of the Summary (p 14). There, the tenants state: Minimum Fixed Term of 24-Months 50 Finding that the termination notices were retaliatory is problematic and untenable for the following reasons. 51 We were left with no option other than to enter into a 12 month fixed-term agreement despite seeking a 24-month minimum fixed-term. 52 Based on the fact that the landlord and agent agreed to extend the lease for a minimum of another fixed-term (and that this aligned with the landlord's long-term goal for the investment property); no evidence was ever provided to substantiate the allegations of proposed renovation; the unconscionable I excessive rent increase being issued after learning of our poor health; and no evidence ever being provided to justify the reasonableness of the rent increase (with consideration for Section 44(5) Residential Tenancies Act 2010 (NSW)) - the landlord avoided entering into a tenancy agreement (made on 12 July 2022 - commenced on 30 July 2022) with a minimum fixed-term of 2 years so he was permitted to issue the rent increase and eviction notice in under 12 months (should we raise complaints). 53 Email correspondence between the agent and ourselves, including several conversations with the agent (during routine inspections) where it was made perfectly clear that the landlord agreed to renew our fixed-term agreement, both corroborate that our fixed term was supposed to be renewed - NOT to continue as a periodic agreement. 54 Furthermore, the recipe for a binding contract requires at minimum three things: 1) an offer; 2) consideration; and 3) acceptance. All the factors have been satisfied, and despite all of our evidence that all parties agreed to renewal the fixed-term of our agreement, the landlord and managing agent never advanced any argument that they did not agree to renew the fixed-term agreement for a minimum of another term. The consequences are that we did indeed establish a contract for a minimum-fixed term of 24-months by words, conduct and verbal agreement (2 parties - my father and myself) 55 One legal case: Stellard Pty Ltd v North Queensland Fuel Pty Ltd, demonstrates that the mere fact that parties expect that a formal document will be completed at a later stage does not prevent the informal negotiations from becoming binding.
3. In our view, it is sufficient to refer back to the June notice, the tenants' 5 June email, the Landlord's September email and the tenants' document dated 12 December 2023 identified above as evidence no agreement was reached in 2022 or at any other time that the term of the tenancy would be for 24 months.
4. As the landlord pointed out in oral submissions in respect of the tenants' 5 June email, why would the tenants be asking in June 2023 to extend the tenancy if they had a 24 month agreement?
5. Further, the tenants' document dated 12 December 2023 puts beyond doubt the tenants' position on this matter. Under the heading "Unsound reasoning", found at RB Bundle B p 141, the tenants say: Since we have been paying rent through a periodic (ongoing) agreement following completion of our fixed-term agreement, the only legally permitted way for the landlord to regain possession of the property is to terminate the 'periodic agreement' in accordance with the Residential Tenancies Act 2010 (NSW) on 'no grounds', 'not earlier than 90 days after the day on which notice is given' as specified hereunder - no such notice has been issued.
6. This statement is wholly inconsistent with the allegation that there then existed a 24 month fixed term tenancy.
7. Consequently, this challenge fails.

Was the notice of termination dated 4 January 2024 retaliatory?

1. The final matter to deal with is the contention that the termination notice was retaliatory.
2. Section 115 of the RT Act provides: 115 Retaliatory evictions (1) The Tribunal may, on application by a tenant or when considering an application for a termination order or in relation to a termination notice - (a) declare that a termination notice has no effect, or (b) refuse to make a termination order, if it is satisfied that a termination notice given or application made by the landlord was a retaliatory notice or a retaliatory application. (2) The Tribunal may find that a termination notice is a retaliatory notice or that an application is a retaliatory application if it is satisfied that the landlord was wholly or partly motivated to give the notice or make the application for any of the following reasons - (a) the tenant had applied or proposed to apply to the Tribunal for an order, (b) the tenant had taken or proposed to take any other action to enforce a right of the tenant under the residential tenancy agreement, this Act or any other law, (c) an order of the Tribunal was in force in relation to the landlord and tenant. (3) A tenant may make an application to the Tribunal for a declaration under this section before the termination date and within the period prescribed by the regulations after the termination notice is given to the tenant.
3. In this appeal, the tenants said in the Summary at p 31: Retaliatory Eviction 102 As the Member's reasons clearly illustrate (found on Pages 2-5 of his notice), the Member choose not to read our Cross-Application. The Member made an error of law by asserting we had not raised issues about the termination notice for rental arrears during the hearing. We received the Landlord's application filed with NCAT on 18 January 2024, only one day after informing Wilsons that we would pursue legal action through the Local Court for numerous breaches of our tenancy agreement (described in our Cross-Application) and report the deplorable state of affairs to an extensive mailing list of media contacts (see Pages 21-23 of our Cross-Application). Astonishingly, the day before, Gregory Quilkey suggested / recommended to sit down at Wilsons office (with Andrew Quilkey: Director, Secretary, Shareholder, Principal, and Licencee in Charge at Woy Woy) to discuss our concerns, yet we were never even given the opportunity to respond to their email. Time and again Wilsons has gone back on their word to resolve our concerns about the rent increase being unreasonable (excessive) and unconscionable, which has thwarted our attempts to amicably resolve the dispute.
4. The tenants appear to suggest the Tribunal failed to consider the issue of whether the termination notice was retaliatory. This is plainly incorrect.
5. On the issue of whether the termination notice was retaliatory, the Tribunal said: …, the Tenants bear the onus of proof, to establish on the balance of probabilities that the Landlord was wholly or partly motivated to give the termination notice on 4 January 2024 because the Tenants had taken or proposed to take action to enforce a right of the Tenants under the residential tenancy agreement, the RTA or any other law. The Tenants submitted that in or around December 2023, they informed the Landlord's agent that they will approach the Department of Fair Trading and possibly media outlets in respect of what the Tenants regard as the excessive rent issue, and despite various communication between the Tenants and the Landlord's agent throughout December, no resolution was reached between them, and that led to the termination notice being issued on 4 January 2024. I am unable to be satisfied on the balance of probabilities that the Tenants' proposal to approach the Department of Fair Trading and possible media outlets led to the issue of the termination notice. In my mind, the more likely reason for the termination notice being issued on 4 January 2024 is the prolonged rent arrears since August 2023 which have not been rectified by the Tenants.
6. As the reasons reveal, the issue of whether the termination notice was retaliatory was considered in the context whether a termination order should be made. The Tribunal was correct to consider this issue in the landlord's application notwithstanding the tenants' application had been withdrawn: see s 115(1)(b).
7. As noted in the reasons of the Tribunal, the tenants had failed to pay the increased rent over a considerable period of time. As the evidence reveals, the tenant did not take any steps to challenge the rent increase in the Tribunal until, at the earliest, they sought to defend the landlord's application.
8. The tenants suggest that their threats to go to the Department of Fair Trading and the proposal by the landlord's agent on about 17 January 2024 to meet with the tenant (see pp 21 and 22 of the tenants' bundle identified as "cross application" at the hearing of the appeal) provides evidence to support a conclusion that the termination notice was retaliatory.
9. We do not agree.
10. The correspondence indicates the landlord's agent at all times sought to meet and address the concerns raised by the tenants in their communications with the agent, despite an increase in the vitriolic and accusative true nature of those communications. This conduct does not lead, of itself, to the conclusion that the issue of the termination notice was retaliatory. The landlord was entitled to take action to terminate the tenancy in circumstances where, over an extended period of time, the tenants had failed to pay all the rent due.
11. It follows that this ground of challenge should be rejected.

Disposition of the appeal

1. As we indicated above, consistent with the principles in Jackson, it has been necessary for us to extensively examine the merits of the appeal to determine whether time should be extended to lodge the appeal. Further, if time is extended, there is a question of whether leave to appeal should be granted in respect of grounds of appeal other than those which raise a question of law and, if so, in respect of what issues.

Extension of time

1. As to extending time, on balance we are satisfied that such an order should be made. This is because there is some evidence to support a conclusion that the tenant may not have received actual notice of the decision and reasons therefore until 10 April 2024. We have reached this conclusion despite the fact the Notice of Appeal was dated 18 April 2024 and could have been filed in an earlier point in time. We will make this order extending the time to appeal until 26 April 2024.

Leave to appeal

1. There is a potential error of the Tribunal in failing to exercise jurisdiction in connection with the claim for rent reduction under s 44(1) of the RT Act. This was the only error which we have identified that may raise a question of law.
2. We have not been able to adjudicate on this question of law due to the failure of the tenants to provide a complete transcript of the proceedings at first instance. However, it seems to us that we should grant leave to appeal in the present case because of this fact.
3. Our approach alleviates the possible need to obtain a full transcript of the original hearing to adjudicate on the question of law and/or engage in an extended debate concerning the tenants' failure to provide all relevant evidence, in support of their appeal, including a full transcript. In this regard, by granting leave we are able to determine what, if any, corrective orders should be made under s 81 of the NCAT Act in the determination of this appeal.
4. This is consistent with our obligation under s 36(1) to determine the just, quick and cheap resolution of the real issues in dispute.
5. Having said that, leave should only be granted in relation to the defence that the Tribunal was in error in failing to conclude the rent is excessive and in failing to make an order under s 44(1)(a) or (b) of the RT Act.
6. Having granted that leave, the appeal on this aspect should be dismissed for the reasons set out above.
7. As to the other Issues, having regard to our reasons above, we are not satisfied the tenant may have suffered a substantial miscarriage of justice in respect of these matters. As explained in relation to each of the other Issues, the conclusions reached by the Tribunal were open to it on the evidence and, on these issues, it could not be said the decision was against the weight of evidence. Nor could it be said the decision was not fair and equitable: see Collins at [77]. In circumstances where the tenants have wrongly failed to pay all the rent over a significant period of time, it could not be said they have been deprived of a significant possibility or a chance that was fairly open of achieving a different and more favourable result: Collins at [79]. Finally, we are not satisfied that the decision of the Tribunal was unreasonably arrived at or clearly mistaken or that there is otherwise an injustice which is reasonably clear: Collins at [84].
8. It follows leave to appeal in respect of the other Issues is dismissed and the appeal should otherwise be dismissed.

Consequential matters

1. As to the consequential orders in this appeal, the stay order should be dissolved and a date fixed for delivery up of possession.
2. The Tribunal originally allowed 4 weeks the tenants to vacate the property: see order 3 of the termination orders. It was not suggested in this appeal that this period was unreasonable. As the tenancy was relatively short, having commenced in 2022, this period of time seems reasonable.
3. The tenants have had the benefit of remaining in the premises by reason of their appeal. Having said that, the photographs provided in the appeal suggests that they need time to vacate the premises and remove their possessions.
4. Consequently, we will suspend the order for possession for 4 weeks from the date of our orders to enable the tenants to vacate the property. An application may be made for the issue of a warrant for possession after this time if the tenants fail to vacate the property.

Orders

1. Having regard to the above, we make the following orders: 1. The time to lodge the appeal is extended to 26 April 2024. 2. Leave to appeal is granted in connection with the issue of whether the Tribunal was in error in failing to conclude the rent increase or the rent was excessive and make an order under s 44(1)(a) or (b). However that appeal is dismissed. 3. Leave to appeal is otherwise refused and the appeal is dismissed. 4. The order made by the Appeal Panel on 26 April 2024, extended by order dated 8 May 2024, suspending the order for possession, is vacated and the date for possession in order 3 made on 27 March 2024 in application 2024/00021232 is varied so that the order for possession is suspended until 28 days from the date of publication of the orders in this appeal.

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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: 28 June 2024