Donoghoe v Compass Housing Services Co Ltd

NCAT Appeal Panel|2016-07-26

Introduction

Mr Donoghoe, a sub-tenant of a two bedroom town house, has made several applications against Compass Housing Services Co Ltd under the Residential Tenancies Act 2010 (NSW). Compass is a social housing provider which leases the premises from a private landlord. It was represented in these proceedings by an employee, Ms Bently.
Mr Donoghoe's claims arose from damage to the town house in which he was living, from a water leak in November 2012. The leak led to part of the ceiling collapsing. Compass relocated Mr Donoghoe to a hotel so repairs could be carried out. The ceiling and downstairs area were repaired and the downstairs carpet was replaced. Mr Donoghoe returned to the premises on 11 April 2013. The upstairs carpet was not replaced until December 2013. Mr Donoghoe claimed a rent reduction of 50% on the basis that the upstairs carpet was damaged and mouldy and, apart from the bathroom, he could not use that level.
Mr Donoghoe has appealed to the Appeal Panel from orders of the Tribunal made on 18 April 2016 dismissing: 1. an application for rent reduction based on withdrawal of services because of the condition of the downstairs carpet following the ceiling collapse: Residential Tenancies Act 2010, s 43(1); 2. an application to extend time for the lodging of a claim for compensation for property damage: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 41.
An internal appeal may be made as of right on a question of law but an appellant must obtain the Appeal Panel's permission (or leave) to appeal on other grounds: Civil and Administrative Tribunal Act, s 80(2)(b). The Appeal Panel may grant leave to appeal from a decision made by the Consumer and Commercial Division but only if satisfied that the appellant may have suffered a "substantial miscarriage of justice" because the decision was not fair and equitable, against the weight of evidence or significant new evidence is available that was not available at the hearing: NCAT Act, Sch 4, cl 12.
This appeal raises four issues: 1. whether the Tribunal made an error when it concluded that the principle of issue estoppel applied to a claim Mr Donoghoe had made for rent reduction based on the withdrawal of services by Compass; 2. whether the Tribunal lawfully exercised its discretion to refuse to extend time for Mr Donoghoe to apply for compensation for damage to his property; 3. whether the Appeal Panel should give leave to Mr Donoghoe to lodge fresh evidence; and 4. whether Compass should pay Mr Donoghoe's costs on appeal.

Rent-abatement claim - issue estoppel

The first ground of appeal was that the Tribunal made an error when it concluded that the principle of issue estoppel prevented Mr Donoghoe from making a claim for rent reduction in relation to the state of repair of the downstairs level. Mr Donoghoe says that he should be entitled to make a claim for rent reduction in relation to the condition of the downstairs carpet because he has never made a claim of that kind. He says his claim for a 50% rent reduction related only to the upstairs carpet. According to Mr Donoghoe, now that Compass has admitted that the whole property was uninhabitable, he is entitled to a complete rent abatement.
Section 43 of the Residential Tenancies Act allows a tenant to ask the landlord for a reduction in rent if the landlord "withdraws any goods, services or facilities provided with the residential premises". The rent "abates" if residential premises under a residential tenancy agreement become wholly or partly uninhabitable: Residential Tenancies Act, s 43(2).
If a tenant applies to the Tribunal for a rent reduction, the Tribunal has power to order that "rent payable … is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities … and that, from a specified day, the rent for residential premises must not exceed a specified amount": Residential Tenancies Act, s 44(1)(b). The Tribunal may have regard to the state of repair of the residential premises when determining whether to reduce the rent: Residential Tenancies Act, s 44(5)(d).
Mr Donoghoe did not challenge the accuracy of Compass's account that he first raised the issue of rent reduction for withdrawal of services (carpet) in an amendment to his application (SH 13/60924). Compass received that amended application on 14 January 2014 and the Tribunal heard the application on 7 March 2014. The claim was for a 50% rent reduction from 11 April 2013, when Mr Donoghoe returned to the property, to 20 December 2013 when the upstairs carpet was replaced. The Tribunal dismissed that part of the application because Mr Donoghoe had not provided sufficient evidence to enable it to determine the extent to which his use of the property was affected.
Mr Donoghoe appealed to the Appeal Panel. On 22 May 2016, the Appeal Panel expressed the view at [35] that the issue was whether his unit had become wholly or partly uninhabitable for the period 11 April 2013 to 20 December 2013, when new carpet was laid upstairs. The Appeal Panel concluded that the Tribunal had given inadequate reasons for its conclusion on that point and remitted the matter for re-consideration: Donoghoe v Compass Housing Services [2015] NSWCATAP 97.
The Tribunal re-heard the matter and identified the issue as being whether the rent is excessive and whether there was a withdrawal of services pursuant to s 44(1)(b) of the Residential Tenancies Act. The Tribunal understood Mr Donoghoe's claim as being for a 50% rent reduction from 11 April 2013 to 20 December 2013. The Tribunal found that the only damage to the upstairs carpet was wear and tear and a rip in front of the bathroom. The Tribunal also found that Mr Donoghoe had not reported that matter until 1 October 2013. In those circumstances the Tribunal ordered Compass to pay Mr Donoghoe $57.86 being $5.00 per week from 1 October 2013 to 20 December 2013.
Mr Donoghoe appealed from that decision (AP 15/45186). On 21 September 2015, the Appeal Panel heard the appeal and gave oral reasons. The Appeal Panel upheld the appeal and ordered Compass to pay Mr Donoghoe $3046.50 being 50% of the rent from 11 April 2013 to 20 December 2013. The Appeal Panel found that the state of the premises between those dates was very poor and, in particular, that the unsatisfactory state of the carpet downstairs persisted until October 2013 when the carpet was replaced.
The Appeal Panel held that the Tribunal's decision had miscarried because the Member's attention was directed to the situation upstairs whereas the problem was the situation downstairs, "with the odour and the mould and the water that the premises were quite difficult to live in".
While these appeals were being heard, the Tribunal determined several other aspects of Mr Donoghoe's claim against Compass. On 15 March 2016 the Tribunal made an order, by consent, that Compass carry out certain inspections and repairs (the Work Order). The balance of the application was listed for hearing on 18 April 2016. At that time, Mr Donoghoe claimed a rent reduction based on the condition of the downstairs carpet. The Tribunal decided that the Appeal Panel had determined that application at the 21 September 2015 hearing and that Mr Donoghoe was prevented by the doctrine of issue estoppel or cause of action estoppel, from seeking compensation for a rent reduction based on damage to the downstairs carpet. The Tribunal based its decision on a sound recording of the oral reasons for decision. It is that decision from which Mr Donoghoe now appeals.
The Tribunal set out the principles relating to cause of action estoppel and issue estoppel and gave the following reasons for its decision: In AP15/45186, the Appeal Panel made orders allowing an appeal by the applicant and ordering the respondent to pay the applicant the sum of $3046.50 … I consider it is clear from the oral reasons for decision given by the Appeal Panel that the appeal was allowed because the Appeal Panel considered that the member erred in focusing on the upstairs of the premises and did not properly consider the situation concerning the downstairs of the premises, that is, the carpets downstairs being in an unsatisfactory state as a result of the ceiling collapse in November 2012. The order for the payment of money to the tenant clearly, in my view, included compensation or a reduction of rent based on the condition of the downstairs carpet. The applicant is therefore barred from now seeking compensation or a rent reduction based on the downstairs carpet in these proceedings.
Mr Donoghoe submitted that he is entitled to make a new claim for rent reduction in relation to the condition of the downstairs carpet because he has never made a claim of that kind. He says his claim for a 50% rent reduction related only to the upstairs carpet. According to Mr Donoghoe, now that Compass has admitted that the whole property was uninhabitable, he is entitled to complete rent abatement.
Compass contends that the Appeal Panel's orders finalised the application for rent reduction in relation both the upstairs and downstairs carpet. In those circumstances Compass agrees with the Tribunal's decision that the applicant is estopped from pursuing a claim which has already been finally determined.

Consideration of rent abatement claim and issue estoppel

We find that Mr Donoghoe's original claim was for a rent reduction because he was unable to use the upstairs level of the town house, apart from the bathroom, from 11 April 2013 to 20 December 2013 when new carpet was laid upstairs. Mr Donoghoe did not claim a rent reduction because he was unable to use the downstairs level.
In the September 2015 decision, the Appeal Panel appears to have decided to deal with the appeal by way of a new hearing: NCAT Act, s 80(3)(a). In effect, the Panel amended Mr Donoghoe's claim to include a claim for rent reduction because of the state of repair of the downstairs level. The Appeal Panel then considered the evidence as to the condition of that level and ordered a 50% rent reduction.
The Tribunal quoted the principles of cause of action estoppel and issue estoppel as set out by the Appeal Panel in Pickering v Yi [2015] NSWCATAP 161 at [55] - [56]: 55. Cause of action estoppel, arising from the doctrine of res judicata, is where a final decision is made by a Court or Tribunal having competent jurisdiction over the cause or matter in litigation which disposes once and for all of the matters decided so they cannot be thereafter raised or re-litigated. First, the decision precludes any party to the litigation from disputing the correctness of the earlier decision in law and fact. Secondly, the right or cause of action is extinguished, merging in the judgment which is pronounced in the earlier proceedings. At a practical level cause of action estoppel (or res judicata) is a defence to a claim made in legal proceedings and, if established, is a complete bar to subsequent proceedings. 56 .In contrast, issue estoppel may arise if an issue of fact or law is determined between parties in earlier proceedings and the same parties are subsequently involved in litigation where one of the parties seeks to re-litigate the issue of fact or law, regardless of whether the cause of action is the same. Issue estoppel may be raised as a defence to the claim made in the subsequent proceedings.
We accept that these passages are an accurate reflection of the principles and neither party argued otherwise. Issue estoppel is the relevant principle in this case.
The principle of issue estoppel applies to Mr Donoghoe's purported claim for rent reduction based on the state of repair of the downstairs carpet. That is because, even though Mr Donoghoe has never made such a claim, the effect of the Appeal Panel's decision was to amend his claim, consider the evidence in support of it and make final orders. Mr Donoghoe has not appealed from that decision.
The Tribunal was correct when it concluded that Compass has a complete defence to the claim for rent reduction which Mr Donoghoe purported to make to the Tribunal on 18 April 2016. This part of Mr Donoghoe's appeal is dismissed.

Compensation for the ceiling collapse

In the 18 April 2016 Tribunal hearing, Mr Donoghoe claimed $3,000 for damage to his personal property because of the ceiling collapse. That claim alleged a breach of s 63 of the Residential Tenancies Act: (1) A landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises.
The Tribunal dismissed that application because it was made on 13 December 2015, more than 3 months after Mr Donoghoe became aware of the breach: Residential Tenancies Act, s 190; Residential Tenancies Regulation 2010, cl 22. The Tribunal may extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction: NCAT Act, s 41.
The Tribunal has a discretion to extend the period of time for Mr Donoghoe to make a claim for a breach of s 63 of the Residential Tenancies Act. The Tribunal applied the principles set out by the Appeal Panel in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. Mr Donoghoe did not submit that those principles were not relevant or had been applied incorrectly. Rather, he submitted that Compass was aware of the damage. Whether Compass was aware of the damage caused to Mr Donoghoe's property is not the point. The legislation provides that a tenant must claim damages within 3 months of becoming aware of those damages. The Tribunal did not make a finding as to when he became aware of the damages to his personal property but found that he made the application approximately 2 years and nine months late. That finding suggests that Mr Donoghoe knew of the damages but did not make a claim within the required time frame.

Fresh evidence

A party seeking to adduce fresh evidence in an appeal may only do so with the leave of the Appeal Panel and in accordance with well-established principles. If the Appeal Panel is to exercise its discretion in favour of the party applying for leave, it must be "affirmatively satisfied" that, having regard to the findings of the Tribunal at first instance, the further evidence, if tendered at the hearing conducted by the Tribunal was "likely to have produced a different result": Building Professionals Board v Hans (2008) NSWADTAP 13 at [54].
The fresh evidence which Mr Donoghoe sought to tender was an email from him to various employees of Compass dated 6 September 2012. The email was not sent to Ms Bently, but Mr Donoghoe submitted that she would have known about it. It detailed several maintenance issues relating to the premises. On the basis of this email Mr Donoghoe says that Compass knew about the leak and the damage before the ceiling collapsed.
Compass did not object to the tendering of this evidence on appeal but we have decided not to accept it. Even if the email had been before the Tribunal at first instance it is not likely to have produced a different result. The basis for the Tribunal's decision was that Mr Donoghoe was aware of the damage but did not make a claim in time. It does not matter when Compass became aware of the damage.

Costs

Mr Donoghoe applied for costs of $483.75 for items such as photocopying, parking, printing, postage and application fees. The general rule is that each party pays their own costs. It is only where the Tribunal is satisfied that there are special circumstances that costs may be awarded. Section 60 of the NCAT Act provides: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
The basis for this application appears to be that Compass knew about the damage at least from 6 September 2016 and that Ms Bently has not told the truth about that matter.
Mr Donoghoe is self-represented. He said it took him many hours to prepare the transcript of the proceedings below and Compass should compensate him for all the inconvenience it has put him to.
Mr Donoghoe has not identified any matter listed in s 60(2) that would justify an order for costs. The appellant's application for costs is refused.

Orders

Leave is refused for the appeal to be made on grounds other than questions of law.
The appeal is dismissed.
The Appellant's application for costs is dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 September 2016

Residential Tenancies Regulation 2010(NSW)

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