Duffey v Tunteveski; Tuntevski v Duffey

Material facts and contentions of the parties

The dispute arises from a residential tenancy agreement that was made on 20 March 2019. It was a fixed term agreement of 12 months duration which was initially expressed to commence on 8 April 2019 and end on 8 April 2020. However, for reasons explained following, the term of the agreement was later varied to commence on 6 April 2019 and end on 6 April 2020. The agreement is in standard form. The rent payable under the agreement was $1,150.00 per week, payable in advance. The number of occupants approved to live at the premises was four. In this respect the tenants intended to live at the premises with their two children.
The standard form clause 41 Break Fee clause was omitted from the agreement by being struck through. In its place there is a Special Condition concerning the break fee that would be payable for any non-permissible early termination of the fixed term agreement. That clause is in the following terms: Break fee policy: The Landlord and Tenant agree that if the Tenant was to end the Lease prior to the Lease expiry for reasons outside of those permitted in the Residential Tenancies Act 2010, the Tenant is required to: (a) continue to pay rent until the day prior to the new Tenants Lease start date. (b) Pay the Letting Fee normally payable by the Landlord to the Agent, which is equivalent to one week's rent + GST (c) Pay any related Advertising Costs in order to facilitate the prompt re-letting of the property. This may or may not be payable depending on the Agent's advice/method of re-letting advertising.
At the start of the tenancy, the tenants were required to provide the landlords with a rental bond of $4,600.00, being the equivalent of four weeks' rent. The rental bond was deposited with Rental Bond Services. During the three weeks after the tenants returned possession of the premises to the landlords on 24 May 2019 the landlords refused to consent to the release of the bond because they claimed that the tenants' removalist had caused damage to the timber floors of the premises. The landlords sought the rectification of this damage and to retain the bond as security whilst this occurred. That dispute was subsequently resolved and does not feature in the dispute that is now before the Tribunal. Following the resolution of that dispute, and despite the claims now asserted by the landlords in these proceedings, the rental bond was released in full to the tenants without further objection by the landlords.
The residential premises is a three storey, free standing dwelling on land overlooking Burraneer Bay at Burraneer. The top two levels are the residence and the lower level has a double garage and storage area. The home has four bedrooms. The main bedroom (bedroom 1) is on the second level and has an associated ensuite bathroom and walk-in robe. On that level, there is also a study and living area which opens onto a balcony. The other three bedrooms are located on the middle level, along with the kitchen, laundry, an open plan lounge and dining area that opens onto a verandah, and another living area at the rear of the house which opens onto an outdoor entertaining area. Each of the bedrooms and study has a carpet floor covering. There are timber floor coverings in the dining and living areas. There are front and rear gardens. The home is south facing with a north facing back yard. The home is built on a slope which has been partially excavated to accommodate the double garage, the rear section of which is subterranean as a result (the property).
Prior to entering into the residential tenancy agreement the tenants inspected the property twice, on 15 and 16 March 2019. They did so in the company of Ms Duffey's parents. On both occasions the property was occupied by former tenants who did not vacate until on or about 1 April 2019. The inspection on 15 March 2019 was a private inspection arranged and attended by the landlords' agent, Mr Stuart Payne, who is the licensee of a real estate agency trading as Burraneer Bay Real Estate. It lasted almost 1 hour. The inspection on 16 March 2019 was an open inspection conducted by a property manager, Mr Luke Payne. It is not in issue that at both inspections Ms Duffey stated to Messrs Payne that she wanted reassurance that the premises was not affected by damp and mould as she had a mould allergy and also had allergic sensitivity to chemicals. Nor is it in issue that the Messrs Payne said to Ms Duffey in response that their agency had not received any complaint or report about damp and mould from the then current tenants. Mr Stuart Payne also stated to Ms Duffey the property was well ventilated, including the sub-floor garage and storage area.
During the inspection conducted on 15 March 2019 Ms Duffey noticed that there was some mould on a blind in bedroom 1. It is not in issue that she told Mr Stuart Payne that this blind would have to be replaced if she and Mr Duffey were successful in their application to lease the property. The tenants do not contend that they noticed any damp or mould smell at the property at either inspection, or that they noticed any damp or mould, other than on the upstairs blind. It is convenient to note at this point that Mr Tuntevski replaced the mould affected upstairs blind in accordance with Ms Dufffey's request on 3 April 2019 prior to the start of the tenancy.
Following their inspection of the premises, the tenants made an application to lease the property which was approved.
On or about 1 April 2019 Ms Duffey became aware from the landlords' agent that the then current tenants were obliged to have the carpets of the premises steam cleaned prior to their departure from the property. She also learned that this work was to be carried out by a carpet cleaning contractor recommended by the landlords' agent using standard cleaning chemicals. Due to her chemical sensitivity, Ms Duffey requested the agent to arrange for the carpet be cleaned instead by a carpet cleaning contractor of her choice, Maryanne and Mario Muscat, who conduct a business under the trading name "Organic Carpet Cleaning" and who use organic cleaning products. The agent conveyed that request to the then current tenants, but they refused to agree to it, apparently because the cost of that service was $65.00 higher than the cost of the service quoted by the landlords' contractor. The issue was resolved by the agent arranging for the then current tenants to pay to the landlords the $195.00 that the landlords' contractor had quoted for the service, which was then credited to Mr and Ms Duffey's account. Mr and Mrs Duffey then arranged for the carpets to be steam cleaned by Organic Carpet Cleaning at their own expense. That work was carried out on 3 April 2019 commencing at approximately 9:00am. The landlords' agent provided Ms Duffey with keys to the property to facilitate access by the carpet cleaner.
At 2:00pm on 3 April 2019, apparently some hours after Organic Carpet Cleaning had completed the work, Ms Duffey attended the property to inspect the carpets. She observed that the level 3 carpet was dry, but that the level 2 carpets remained quite wet. As a consequence, the tenants requested, and the landlords' agent agreed, that they could retain the keys to the premises until close of business on 4 April 2019, so that they could air the house and dry the carpets with fans. The fans were left on overnight but the carpets remained wet the following morning, and despite the house being open and the fans being in operation all day that day, they remained so at 4:30pm. This resulted in the tenants requesting that they retain the keys to facilitate the drying of the carpets over the next day. However, the landlord's agent refused to agree to this, insisting that the property be locked and the keys returned, which is what occurred.
As a consequence, on 5 April 2019, the tenants negotiated to commence the lease from the following day, 6 April 2019, so that they could continue with their efforts to dry the carpets. When the tenants took possession of the property on 6 April 2019 the level 2 carpets remained wet. In an effort to dry the carpets the tenants installed three dehumidifiers, one in each of the level two bedrooms. On 9 April 2019 they also installed two air purifiers in an attempt to eradicate a damp and musty smell that was permeating level 2 of the premises. On 10 April 2019 the carpets remained wet and the damp and musty smell persisted. As a consequence, the tenants purchased another dehumidifier and another two air purifiers and installed these on level 2 in a further attempt to dry the carpets and eradicate the damp and musty odour. The tenants submit that the combined noise emitted by these machines was seriously disruptive of their peace.
It is not clear on the evidence if, and if so, when, the carpets on level 2 did dry out before the tenants returned possession on 26 May 2019. In the tenants' submissions it is stated that the carpets remained wet on 10 April 2019 and that the property remained affected by dampness (and mould) on 18 April 2019 which is the date they ceased to occupy the premises.
There is a dispute between the parties as to whether the landlords fulfilled their obligation under section 29 of the RT Act to prepare and provide to the tenants a Start-of-Tenancy Condition Report. The landlords' agent contends that it did so on the landlords' behalf and left copies on the kitchen benchtop for the tenants' attention on or about 5 April 2019. The tenants deny that. In any event, there is a Start-of-Tenancy Condition Report for the premises in the landlords' bundle which is signed by the landlords' agent and dated 1 April 2019. In the "health issues" section of that report it is stated that the premises does not have any signs of mould or dampness. "Wood rot" is noted at the bottom of the laundry and main bathroom door frames. The contents of this Condition Report otherwise have no bearing on the issues for determination in this proceeding.
The tenants commenced moving into the property on 6 April 2019 but the majority of their possessions did not arrive until 9 April 2019 and they did not personally occupy the premises until that date. They contend that Mr Duffey developed a sore throat, "foggy brain" and "respiratory discomfort and disruption" on 6 April 2019 in the course of moving their possessions into the property. They also contend that upon their arrival at the property on 9 April 2019 they noticed a "damp" smell in the kitchen and kitchen cupboards, "an old musty" smell in the bedroom 3 cupboards, and a "damp smell" in bedroom 2. As a consequence the tenants engaged a professional cleaner to clean and dry the kitchen and its cabinetry and (as noted above) they installed air purifiers in bedrooms. The tenants submit that because the carpets on level 2 remained wet, they were obliged to lay mattresses in the wooden floor of the level 2 living area near the kitchen and sleep there. This is where the tenants and their children continued to sleep until they ceased to personally occupy the property on 18 April 2019.
In cross-examination of the tenants by Mr Tuntevski issue was taken with the tenants' decision to sleep on the floor of level 2, rather than occupy bedroom 1 on level 3 on the basis that there was no issue that the carpet on that level was dry and the area was not affected by damp. No direct answer was given by the tenants to this line of questioning, and no particular explanation for this decision emerges elsewhere in the evidence.
The tenants submit that on 10 April 2019 Ms Duffey developed similar symptoms to those which Mr Duffey was experiencing, being "respiratory discomfort and disruption, foggy brain, burning tongue sensation and fatigue". They also submit that on that date their 9 year old son, Joshua, developed a cough, which persisted up to 15 April 2019 when he was taken to see the tenants' doctor, Dr Redden. The tenants submit that on 17 April 2019 their other son, Daniel, aged 5, developed breathing problems and cough symptoms which worsened over the course of the evening into convulsions. Daniel attended Dr Redden for consultation the following day.
As a result of his examinations of Joshua and Daniel, Dr Redden recommended that the tenants and their children seek alternative accommodation immediately. He also wrote a letter "To Whom it May Concern" dated 18 April 2019 which states as follows: Mrs Duffey suffers from a mould allergy and experiences severe and intolerable symptoms when exposed to mould. Her current accommodation arrangements have caused her to come into contact with mould in her home due to the building she is living in being affected by damp. As her current symptoms are severe and intolerable, I believe that it is imperative that she should move immediately into alternative accommodation. The other members of her family, who also suffer from allergic problems or mould sensitivity, are also affected by significant symptoms which are likely to be due to mould exposure. Again, I feel it is imperative for them to immediately move to alternative accommodation.
On 3 August 2019 Dr Redden also wrote another letter addressed "To Whom it May Concern" about Ms Duffey's mould allergy. That letter states as follows: Ms Kim Duffey has objective evidence of mould allergy, with evidence of acute allergic reaction at the time of the blood tests provided. This suggests that she has had an acute allergic reaction to mould. Attached to this letter is a pathology report of a blood sample collected on 9 February 2018 and reported on 16 February 2018 which appears to report high sensitivity to grass pollen and Alternaria alternata (fungus).
The tenants have also submitted into evidence a Statutory Declaration made by Dr Redden dated 3 August 2019, which states as follows: I am a medical doctor and general practitioner. I have been working as a medical doctor since 1990, and have worked in general practice since 1992. I have the professional qualifications of MBBS, FRACGP and am a general practice supervisor of GP registrars. I have been the family doctor for Ms Duffey and her family since 2016 and they have attended this practice since 21012. I have no personal relationship with Ms Duffey or her family outside of our professional relationship. The letters provided to her in regard to her symptoms was based on objective medical findings.
The tenants submit that due to their concern about the damp and musty odour at the property, and it potential health impact, they arranged for a "Building Biologist", Ms Kelly Abeleven, who is associated with a business operating under the trading name "Building Biology" to attend the property on 17 April 2019 to undertake a "Healthy Home Assessment". The report arising from that assessment is in evidence. In that report Ms Abeleven states that she is qualified to provide the opinion she gives because she has completed an Advanced Diploma if Building Biology and Mould Testing through the Australian College of Environmental Studies. She also states that she is IICRC (presumably, the Institute of Inspection, Cleaning and Restoration Certification) Certified in Water Damage Restoration.
The scope of the inspection is ascertained from reading different sections of the report. Level 3 of the property, the roof, roof space and garage were not inspected. Spot checks only were carried out for moisture in the walls and floors. The assessment was non-invasive and involved a visual inspection accessible areas of the house and the measurement of spot relative and wood moisture content levels in various locations using a Protimeter.
In the opening section of her report, which is headed "Observations and Recommendations" Ms Abeleven states: Mould odour was detected upon entering the home when walking past the garage, when entering the kitchen and when opening the bedroom 1 wardrobe. Entry to the garage was not possible due to client's storing their items in front of the door of the garage to avoid possessions being contaminated. The window of the garage was open and a strong odour was coming from this area when walking past. … Observations and health hazards identified in the home at the time of the inspection include: Previous moisture intrusion to garage, water damage from water proof membranes in bathrooms, and chronic dampness around and under the kitchen sink providing ideal conditions for mould growth Visible suspect mould in wardrobe of Bedroom 1 and in cupboard under the kitchen sink. … A strong damp, earthy and musty smell present in several areas of the residence. The damp, musty odour noted in the garage level of the home tends to arise from microbial volatile organic compounds (MVOCs) produced by gram negative bacteria and fungi Drainage related issues - water accumulating adjacent or under the building from excessive rainfall, moisture wicking through the foundation causing subfloor dampness and dampness in the lower level concrete slab and inadequate drains. Lack of mechanical ventilation in both bathrooms. Roof space ventilation - water condensing under the roof cladding may arise from humidity generated from bathing, cooking and laundering where the exhaust fans in these rooms are ducted directly to the roof space. Sub-floor moisture. The estimated rate of evaporation from a 93m3 normal subfloor soil is 45 litres of moisture per day. Subfloor moisture at the property may be due to: Limited number of subfloor vents/grilles. Lack of cross ventilation in subfloor Topography of the land. The house is built into a hill and the ground level is higher than the ground level under the home in some areas Poor ground water drainage immediately around the home. Water is not diverted away from the building Subfloor moisture may result in high roof space moisture levels if there is an open path through the wall cavity between the subfloor and the roof space.
In a section of her report headed 'Testing - Moisture Mapping" Ms Abeleven states that the door frames of both bathrooms were "wet" at the time of her inspection. She measured Wood Moisture Equivalent readings of 25.6 in the hallway bathroom which she notes represents "fungal growth conditions". She also states that she observed peeling paint and (water) damaged timber in both bathrooms. Ms Abeleven also states that she recorded Relative Moisture Content readings of up to 528 on the hallway bathroom tiles next to the shower, which she notes represents "wet" conditions which are conducive to mould growth.
Ms Abeleven also notes the following visual observations: Water damage around the dishwasher (figure 1) Water damage around the braided water hose in bedroom 1 (figure 2) Suspect visible mould under the kitchen sink which was also associated with a strong odour (figure 3) Water ingress into the kitchen benchtop from the kitchen sink (figure 4) Water damage and possible wood rot to a bathroom door frame (figures 5, 7 and 8) Suspect visible suspect mould on bedroom 1 wallpaper (figure 9) Suspect visible mould which was also associated with a strong odour in the bedroom 1 wardrobe (figures 10 and 11).
Apart from these comments the balance of Ms Abeleven's report appears to be constituted by commentary about damp and mould, its health risks, and building methods and materials that are non-specific to the property or her inspection of it. It is also not clear from Ms Abeleven's report how she was able to conclude that the subfloor area (presumably, meaning the garage storage are) had been previously subject to water penetration and had high moisture content when she did not inspect the interior of this area of the property. Similarly, it is not clear on what basis she could make any comment about the roof space ventilation. It would also appear that Ms Abeleven's observations about mould in the wardrobe of bedroom 1 must be a reference to a bedroom on level 2 of the property because she expressly states that she did not inspect the "top floor of the home".
There is a dispute between the parties as to why the level 2 carpets did not dry (or took so long to dry). In its advertising materials Organic Carpet Clean states that its carpet cleaning machines extract 90% of the water after the clean, and the carpet usually dries within 1 to 2 hours. On 6 April 2019 Ms Duffey telephoned Ms Muscat to advise that the level 2 carpets had not dried and to request her advise. The details of that conversation are set out in an undated signed statement made by Ms Muscat which is in evidence: I Maryanne Muscat of Organic Carpet Cleaning have been in operation with my husband Mario Muscat since July 2012. I was contacted by Kim Duffey to steam clean 4 rooms of carpet organically at 7 Willaburra Rd, Burraneer. We completed this job on 3rd April 2019. … We used our standard cleaning process which is steam cleaning and our machine extracts 90% of the water again so we don't leave carpet very wet. On a nice day the carpets should dry within 2-3 hours depending on what type of carpet it is also. Kim contacted me a couple of days after the cleaning as she was concerned that the carpets on the ground level had not dried, though she noted that the upper level had dried within the expected time - i.e. 2 hours. I advised Kim that this was unusual, however, thought that it may have had something to do with the large rock underneath the house - which was visible as I was leaving the property, as this rock would not allow the required airflow to assist in the carpets drying. I advised Kim to leave all the windows open and try to have a good air flow throughout the house to get the carpets dried. We have been in operation for 7 years and have never had this happen to anyone. I believe there was a lot of moisture due to the large rock under the house.
The landlords contend that the carpets did not dry because the tenants' carpet cleaning contractor left the carpets too wet. They further contend that it was the wet carpets which caused the premises to become affected by mould.
On 18 April 2019 the tenants and their children left the premises to stay with Ms Duffey's parents. Ms Duffey notified the landlords' agent of that fact during the day advising that the internal environment was making the tenants and their children sick. On 27 April 2019 the tenants advised the landlords' agent by email that they did not intend to return to live at the premises and that they sought to negotiate the early termination of the lease on reasonable terms. On 29 April 2019 the landlords' agent agreed to readvertise the property for lease and indicated that the Special Condition break fee clause contained in the residential tenancy agreement would apply, in particular that the tenants would continue to be obliged to pay rent until a lease with a new tenant commenced.
On 9 May 2019 the tenants issued the landlords with a standard form termination notice specifying 26 May 2019 as the termination date. The ground for termination cited in the notice was breach of the agreement by the landlords (section 98). The breach is not particularised on the face of the notice. However, in the covering email to the landlords' agent which enclosed the notice, the tenants state as follows: We hereby give notice to terminate our residential tenancy agreement for [address of premises]. This notice is given in accordance with the Residential Tenancies Act 2010, section 98. We are providing the required 14 days' notice and as per the Tenant Trust Ledger Report we have paid up to 26 May 2019. We will be vacating the property prior to 26 May 2019 as the property was not provided to us in a reasonable state when we moved in and we have the following safety concerns: Water damage visible around the dishwasher Water damage visible around downstairs bathrooms Significant mould under kitchen sink Significant suspect mould in the garage Suspect mould in the wardrobe of bedroom 1 Signs of rising damp on the external property A strong damp, earthy and musty smell present in several areas of the house These concerns pose a health risk to us as well as a risk of contaminating our possessions. The dampness had an immediate detrimental effect on the health of all 4 members of our family and whilst residing in the house for the short time of 12 days, we all developed symptoms associated with mould exposure. These concerns have been supported by a Building Biologist and our family doctor.
The tenants engaged a removalist to remove all their furniture and other possessions from the premises on 16 May 2019, and a professional cleaner to clean the premises on 25 May 2019. They returned the keys to the premises to the landlords' agent at 3:30pm on 25 May 2019. It is not in issue that the tenants paid a total of $8,050.00 in rent during the period they had possession of the premises.
Prior to returning possession, the tenants arranged for a further "mould and moisture assessment" of the property by a building biologist on 17 May 2019. This inspection was carried out by Ms Jeanette Williams who is the Principal Consultant for a business trading as Building Biology Sydney. A report produced by Ms Williams based on her inspection, which is styled as an "Expert Witness Report" and dated 23 May 2019 is in evidence. In that report Ms Williams states that she holds a Bachelor of Business and an Advanced Diploma of Building Biology and that she has worked as a Building Biologist since 2011. The assessment was conducted using a handheld Humidity and Temperature meter, a Protimeter, a Protimeter Dual-Function Moisture Meter and AEML Surface Tape Lifts. Ms Williams made the following (pertinent) findings: Subfloor The soil in the subfloor was damp to touch There was efflorescence on the soil in the subfloor There was a strong musty odour in the subfloor, even with the garage door open The surface temperature of the underside of the timber floorboards exposed in the subfloor was within 2.3oC of the dew point temperature recorded in the subfloor. This indicates a risk of condensation at the underside of the floorboards. … Bedrooms There was a moderate musty odour in Bedrooms 2, 3 and 4, all located on the entry level and directly above the soil subfloor. … There was extensive visible mould inside the wardrobe of Bedroom 2 on the inside of the wardrobe door covering an area > 1m2. This was confirmed by a later laboratory test which also determined that the spore count was 18,480 count/cm2. Such a spore count is classified extreme contamination according to the Australian Mould Guidelines 2010. There was extensive visible mould inside the wardrobe of bedroom 3 on the back wall papered wall covering an area of > 2m2. This was confirmed by a later laboratory test which also determined that the spore count was 32,340 count/cm2. Such a spore count is classified extreme contamination according to the Australian Mould Guidelines 2010. Kitchen One of the braided water hoses in the kitchen under sink cabinet was rusted. This is the likely source of moisture in this cabinet. Water damage to cabinet above dishwasher Visible suspected mould at dishwasher seal There was extensive visible mould inside the kitchen under sink cabinet. This was confirmed by a later laboratory test which also determined that the spore count was 52,360 count/cm2. Such a spore count is classified extreme contamination according to the Australian Mould Guidelines 2010. Bathrooms There was evidence of wood rot at the bottom of the doors frame at the entrance to the main bathroom Tiled floors in both bathrooms recorded maximum relative moisture content indicating potential issues with water proofing and /or plumbing leaks Suspected mould at window of main bathroom Elevated relative moisture content levels were recorded on the outside on the eastern wall below the main bathroom window and bedroom 2 window There was evidence of rising damp in the eastern wall of the garage The lower wall outside the kitchen had slightly elevated levels of moisture Elevated relative moisture content levels were recorded on the kitchen backsplash to the right of the taps. Elevated wood moisture equivalent levels were recorded at the bottom of the timber door frames to both bathrooms on the entry level. Kitchen under-sink sample The dominant genera in sample 1: Kitchen under-sink cabinet was Cladosporium (100%) which contains species known to be allergenic. The likely reason for mould in the kitchen cabinet was the rusted braided water hose creating a slow leak in the enclosed cabinet. In addition, lack of ventilation in enclosed spaces increases the risk for fungal activity … Zero hyphal fragments and the extent of visible mould indicate that the mould sampled was unlikely to be the result of the recent short tenancy of Kim Duffey and family Bathroom 2 Wardrobe The dominant genera in sample 2: Bedroom 2 inside wardrobe door was Aspergillus/ Penicillium - like (100%) which contain species that are known to be either allergenic and/or mycotoxin producers. The likely reason for mould in the Bedroom 2 wardrobe was the location above the subfloor which had high levels of humidity (relative and absolute) and a risk for condensation on the underside of the floor boards. In addition lack of ventilation in enclosed spaces increases the risk for fungal activity. The extensive mould contamination on the inside of the wardrobe door was indicative of conditions that support fungal activity over the long term and highly unlikely to be due to cross contamination from items brought into the home since 9th April 2019. Bedroom 3 Wardrobe The dominant genera in sample 3: Bedroom 3 back of wardrobe on wallpaper was Aspergillus / Penicillium - like (100%) which contain species that are known to be either allergenic and/or mycotoxin producers. The likely reason for the mould in the bedroom 3 wardrobe was the location above the subfloor which had high levels of humidity (relative and absolute) and a risk for condensation on the underside of the floor boards. In addition, lack of ventilation in enclosed spaces increases the fungal activity … Wallpaper is also a common substrate for mould and is at higher risk when there is limited air flow therefore reducing evaporation rates. This extensive mould contamination on the wallpaper at the back of the wardrobe was indicative of conditions that support fungal activity over the long term and highly unlikely to be due to cross contamination from items brought into the home since the 9th April 2019. Low concentration of hyphal fragments and the extent of visible mould indicate that the mould sampled was unlikely to be the result of the recent shot tenancy of Kim Duffey and family Summary and opinions of the expert Due to the significant amount of visible mould growth; elevated moisture reading in building materials in various areas of the property; elevated internal and subfloor relative humidity recordings; elevated internal and subfloor absolute humidity recordings; elevated subfloor dew point temperature; poor subfloor drainage; evidence of dampness in the subfloor; and the presence of musty odour, it is the opinion of the expert (Jeanette Williams) that the property at [address of premises] is adversely affected by high levels of mould and moisture. This is further evidenced in the independent laboratory report results that recorded "Extreme Contamination: in samples taken from three different surfaces within the property. The absence of Hyphal Fragments in the kitchen sample and the low Hyphal Fragments in the Bedroom 3 wardrobe sample indicate that the mould sampled was the result of long term conditions that were supportive of fungal activity and was unlikely to be the result of the recent short tenancy of Kim Duffey and family. The extent of the surface mould in the under-sink kitchen cabinet, the back of the wardrobe doors in bedroom 2 and the wallpaper in the wardrobe of bedroom 3 also indicate that the mould sampled was unlikely to be the result of the rent short tenancy of Kim Duffey and family. Extensive water damage in both bathrooms on the entry level were due to long term water ingress and not as a result of the recent short tenancy of Kim Duffey and family. It is the opinion of the expert … that the property [address] was contaminated by mould due to long term favourable conditions conducive to fungal activity. …
Ms Williams then outlines a four step process for remediating the mould contamination she found, which include engaging an engineer or hydrologist to determine if there are any drainage issues affecting the property, engaging a plumber to check for leaking pipes, replacing the braided water hoses in the kitchen and main bathrooms, replacing the dishwasher seal, removing all water damaged building materials, and then professional mould remediation. Ms Williams also recommends, that in the event that the tenants relocate, they do not take "visibly mould affected items" with them and that they "seek the advice of a professional remediator before taking items from the home to prevent cross contamination.
Purporting to act on Ms Williams' advice, on 23 and 24 May 2019 the tenants disposed of various items of clothing, equipment and furnishings including two refrigerators and six shelving units. There are photographs of some of the items disposed of in the tenants' evidence. None of these photographs depict mould on these items.
Among the items of furniture the tenants brought into the property on or about 9 April 2019 were two wood veneer chests of drawers which were placed in the study on level 2. The landlords' agent took photographs of this furniture when he attended the property on 9 May 2019, and these photographs have been included in the documentary evidence submitted by both parties. Both chests of drawers appear to have water stains and there is a substance covering much of their surfaces which appears to be mould or mildew. The landlords contend that this establishes that it was the tenants who introduced mould to the house.
I did not understand the tenants to dispute that there is some form of fungal material covering the chests. In a Statutory Declaration the tenants' expert, Ms Williams, made on 6 August 2019 she makes the following comments: I did view the piece of furniture in the photo, and it was located next to the kitchen when I inspected the property. I did not test the mould on the furniture and therefore cannot comment on the genera or species of mould present. It is my professional opinion that the mould contamination within the property could not have been caused by the tenants or their furniture …
The landlords have submitted into evidence an Indoor Environment Assessment/Quotation prepared by Mr Anthony Putral who is the director of a business trading as Mould Werx which is dated 19 August 2019 and which is based on an inspection of the property carried out on 7 August 2019. Appended to that report is an Interactive Training International Certification document that certifies that Mr Putral is a person in good standing with the Interactive Training Institute and has qualified by service and examination for the ITI Certification in the following areas: Complete Advanced Structural Drying; Complete Water Damage; Complete Carpet Care; Complete Stone, Hard Floor and Masonry; Complete Mould Remediation; Complete Fire and Smoke Restoration; and, Complete Odour Control.
Mr Putral's report states the following findings: Sensory Observation Level of contamination Low-level mould contamination Extent of contamination Contamination found internal Contamination found in subfloor/rear of garage Relative Humidity levels On the day of inspection initial internal humidity (RH) levels were between 54 - 61% Internal humidity level was around the recommended 60% mark at the time of inspection [figures 2 - 7 are photographs of a Protimeter showing various humidity level readings) Air intake/circulation Adequate intake/circulation throughout at time of inspection Bathroom exhaust fans were working adequately Rangehood was vented externally Flyscreens were installed Visible efflorescence No visible efflorescence on structure internal Subfloor/Cellar Garage door was open at time of inspection No mechanical ventilation system in the sub/floor/garage [Figures 8 -12 are photographs that depict the Subfloor area and state:] Figure 08: Subfloor/garage relative humidity - 59.8% Figure 09: Found mould contamination on damp soil on rock at rear of garage Figure 10: Large passive vents were installed on Eastern side and Western side walls Figure 11: AG line and water pit installed at edge of rock Visible contamination [Figures 13 to 23 are captioned photographs of visible mould and state] Figure 13: Light mould contamination in kitchen cupboards - sink base cabinet Figure 14: Light mould contamination in kitchen cupboards - sink base cabinet Figure 15: Mould contamination on shelves in built-in robe in bedroom 3 Figure 16: Mould contamination on frame in built-in wardrobe in bedroom 3 Figure 17: Mould contamination on ceiling between blind and window Figure 18: Mould contamination in vanity in bathroom Figure 19: Mould contamination on rubber seal of dishwasher Figure 20: Mould contamination on shelves in built-in wardrobe in bedroom 2 Figure 21: Mould contamination on drawers in built-in wardrobe in bedroom 2 Figure 22: Mould contamination on back of mirror door of built-in wardrobe in bedroom 2 Figure 23: Mould contamination in vanity in bathroom next to bedroom 2 Carpet/Underlay/Smoothedge [Figures 24 and 25 are photographs that depict the carpet and state:] Figure 24: No rust found on nails of smooth edges Figure 25: Carpet and underlay was clean - no visible evidence of mould contamination Mould Odour No mould odour noticed at time of inspection … Moisture readings Moisture readings taken throughout the property were all within acceptable levels at the time of inspection Building issues No major building issues Front bathroom door trim is rotten - possibly leak from shower recess Conclusion Mould contamination present at isolated areas at time of inspection. From our experience, it is not unusual and highly likely that the carpet cleaner arranged by the previous tenant, Kim Duffey, had used too much water, didn't extract enough water and left the carpets saturated. The remaining liquid then penetrates through to the underlay and substrate creating the perfect conditions for mould to grow. If carpet is not thoroughly dried within 48 hours after cleaning it becomes classifiable as a Category 2 water damage. It now needs to be treated as water damage and the required water damage restoration process should be undertaken immediately. Failure to do so will result in the ideal environment for mould growth and rapidly emit pungent odours. At this stage replacement of the carpet and underlay is common practice. As for the claim made by the building biologist that the subfloor is the cause of the carpet not drying, this claim is incorrect and not possible. The floor is primarily well above the ground below (floor area to total air volume ratio is excellent and adequate passive vents are installed. Furthermore, the way the readings were taken on the day is not in alliance with best industry practice (meter must be held in the air, not on soil surface) In addition, we tested multiple points across the underfloor timbers in the garage using a Drieaz Hydrosensor II which returned no identification of elevated moisture content. The same results were also found within the house.
Mr Putral makes nine recommendations for remediation, including Lysis Silber treatment of the interior and subfloor of the property, physical decontamination of the areas affected by mould, HEPA filtration during the reclamation process, improving internal fresh air intake and circulation, the use of dehumidifiers, rectification of shower recess waterproofing issues, replacement of rotten bathroom door trims, and the installation of an active subfloor ventilation system.

Consideration

The tenants seek an order under section 45 of the RT Act that would require the landlords to repay them $8,050.00 in rent they paid during the period they had possession of the property. This application is misconceived.
Section 45 provides a remedy by way of reduction in rent in circumstances where a residential tenancy agreement is frustrated. It provides: 45 Remedies for reduction of rent on frustration of residential tenancy agreement (1) The Tribunal may, on the application by the landlord or tenant, make an order determining the amount of rent payable if the rent is abated under section 43(2). (2) The Tribunal may order that - (a) from a specified day, the rent for the residential premises must not exceed a specified amount, and (b) the landlord must repay to the tenant any rent paid by the tenant since the specified day that is in excess of the specified amount
Section 43 sets out circumstances in which rent is to be reduced: Section 43(2) provides that one of these circumstances is where premises become unusable. It relevantly provides: Premises unusable The rent payable under a residential tenancy agreement abates if residential premises under a residential tenancy agreement are - (a) otherwise than as a result of a breach of an agreement, destroyed or become wholly or party uninhabitable.
It is the tenants' case that the damp and mould issues at the premises constitute a breach of the residential tenancy agreement by the landlord in failing to pass possession of the premises to them at the start of the tenancy in a state fit for habitation. Section 45 therefore cannot apply. It only operates in circumstances where premises become wholly of partly uninhabitable otherwise than as a result of a breach of a residential tenancy agreement.
In the alternative, the tenants apply for an order under section 47 of the RT Act that would require the landlords to repay all the rent they paid under the residential tenancy agreement. Section 47 is in the following terms: 47 Tenant's remedies for repayment of rent and excess charges (1) Requests to landlord: A tenant may make a written request to the landlord that the landlord repay to the tenant any rent, or other amounts, paid by the tenant that are not required to be paid under this Act or the residential tenancy agreement. (2) A request may be made during or after the termination of a residential tenancy agreement. (3) A landlord must, within 14 days of a written request by a tenant, repay to the tenant the amount of any rent or other amount paid in excess of the amount payable by the tenant under this Act or the residential tenancy agreement. (4) Tribunal orders: A tenant may apply to the Tribunal for an order for the repayment of rent or any other amount paid by the tenant if a written request by the tenant for payment is not complied with by the landlord within 14 days. (5) The Tribunal may order that rent or any other amount be repaid to the tenant if it finds that the rent or amount was not required to be paid by the tenant under this Act or the residential tenancy agreement.
The tenants' reliance upon section 47 is also misconceived. The section only applies where a tenant pays a landlord rent or other monies not owing to the landlord under a mistake or law or fact. That is not the case here. The rent the tenants seek to have repaid to them was payable according to the terms of the residential tenancy agreement they entered into with the landlords. Additionally, and in any event, the Tribunal has no jurisdiction to deal with this element of the tenants' claim because the order making power contained in section 47(5) is only enlivened after a tenant has made a written request to a landlord for the repayment of rent or other money not owed (section 47(1)) and the landlord fails to comply with that request within 14 days (sections 47(3) and 47(4). In this case the tenants made no such written request to the landlord before making their application to the Tribunal.
The section of the RT Act most apposite to the tenants claim for the repayment of rent is section 44(1)(b) which empowers the Tribunal to order that rent is excessive and to reduce rent where goods, services, and facilities provided with the residential premises are reduced or withdrawn. However, an application for an order under that section may only be made before the end of a tenancy: section 44(3). In this case the tenants' made their application to the Tribunal after the residential tenancy agreement had ended. The application therefore cannot be amended for consideration under section 44(1)(b).
The remaining alternative is to consider the tenants' claim for repayment of rent as a compensation claim in relation to their alleged loss of amenity of the premises. However, that requires the tenants to prove that this damage and loss arises from a breach of an obligation the landlords had to them under the residential tenancy agreement. For the reasons set out following no such breach has been established on the evidence so there would be no utility in amending the application to consider the rent repayment claim on this alternative basis.
The tenants apply for an order under section 109 of the RT Act terminating the residential tenancy agreement on the basis that the agreement was frustrated because the premises was uninhabitable due to damp and mould. This application is misconceived.
Section 81 of the RT Act sets out the circumstances in which a residential tenancy agreement terminates. Section 81(1) provides that this is only in the circumstances set out in the RT Act. Section 81(2) provides that one such circumstances is where a landlord or tenant gives a termination notice in accordance with the RT Act and the tenant gives vacant possession of the residential premises.
In this case the tenants issued the landlords with a termination notice on 9 May 2019 specifying 26 May 2019 as the termination date. That notice was given under section 98 of the RT Act which provides that a tenant may give a landlord a termination notice on the ground that the landlord has breached the residential tenancy agreement. There is no issue as to the validity of the termination notice or as to its manner of service (the landlords do not accept that they were in breach of the agreement, but that is a different issue). The tenants returned possession of the premises to the landlords in accordance with that notice by delivering the keys to the landlords' agent on 25 May 2019. The residential tenancy agreement thus terminated in the circumstance specified by section 81(2) of the RT Act. The Tribunal has no power to terminate a residential tenancy agreement that has already terminated by operation of law, or to retrospectively change the basis upon which the agreement was terminated.
Although the issue is not reached, the Tribunal would not have had the power to terminate the residential tenancy agreement under section 109 in the circumstances of this case in any event. Section 109 only applies, relevantly, in circumstances where residential premises under a residential tenancy agreement become wholly or partly uninhabitable otherwise than as a result of a breach of the agreement: section 109(1). That is, where there is some intervening or supervening event over which neither the landlord nor tenant has any control. As I have already stated, it is the tenant's case that the landlords breached the residential tenancy agreement by failing to pass possession of the premises to them in a state fit for habitation, contrary to section 52 of the RT Act. Section 109 does not apply where there has been a breach of the residential tenancy agreement.
The tenants apply for orders that would compensate them for the costs they incurred in moving in and out of the premises, for the cost of equipment that they purchased to deal with the damp and mould at the premises, for the cost of the reports that they obtained concerning damp and mould issues, and for the cost of two refrigerators and shelving that they disposed of because they believed them to be contaminated by mould.
The Tribunal's power to order compensation under the RT Act only arises where a party to a residential tenancy agreement suffers damage and loss as a result of the breach of the residential tenancy agreement by the other party. It is thus necessary, first, for the tenants to establish that the landlords committed such a breach. If that is established, the tenants must then prove that the damage and loss they allege was a reasonably foreseeable consequence of the breach: Hadley v Baxendale (1854) 9 Exch 341. The tenants bear the onus of proving their case to the civil standard of proof, which is the balance of probabilities: Briginshaw v Briginshaw (1938) 60 CLR 336. This standard of proof was described by Lord Denning in Miller v Minister for Pensions [1947] 2 All ER 372 [at 374] as requiring the Tribunal to be satisfied that an alleged fact was "more probable than not". However, the Tribunal must "feel an actual persuasion of [the alleged fact's] occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality" … [the occurrence or existence of the fact must be established]… to the reasonable satisfaction of the Tribunal": Briginshaw [at 361-2].
As has been stated several times now, the landlord obligation that is engaged by the tenants' case is the obligation to provide the residential premises to a tenant in a in a state fit for habitation. That obligation is codified in section 52(1) of the RT Act. The temporal focus for the performance of the obligation is the date on which possession of premises passes from the landlord to the tenant.
The test for 'habitability' of residential premises was authoritatively stated by the former Residential Tribunal in Menashi v Ly [1997] NSWRT 162 drawing on a decision of the Court of Appeal of the United Kingdom in Proudfoot v Hart (1890) 25 QBD 25. In brief, the term refers to a 'state of repair of the premises [such that] it might be used and dwelt in not only with safety, but with reasonable comfort, by the class of persons by whom and for the sort of purpose for which, they were occupied' 'having regard to contemporary standards'. That test was affirmed by the Appeal Panel of this Tribunal in Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 at [117]. The test of un-inhabitability is a difficult one to satisfy and will not be lightly found by the Tribunal: De Soleil v Palmhide P/L [2010] NSWCTTT 464.
I am not satisfied on the evidence before me that there was any breach of this obligation by the landlord. The evidence does establish that there was a latent damp problem in several areas of the premises which had the potential to propagate mould that that there were three specific, but localised, areas of the premises with a severe mould infestation when the tenants took possession of the premises. Although it is clear that the tenants brought some items of mould infested furniture into the premises, Ms Abeleven, Ms Williams and Mr Putral's reports all indicate long-term, pre-existing damp latency and some specific areas of pre-existing mould in premises. I therefore do not accept the landlords' contention that it was the tenants who introduced mould to the premises. However, I do find that the tenants conduct in introducing mould affected furniture and causing the level 2 carpets to be saturated exacerbated the pre-existing problem.
The pre-existing damp latency and active mould growth present when possession passed reasonably engaged the landlords' obligation to maintain the premises in a reasonable state of repair, but it did not render the premises uninhabitable. There is no evidence that the severe mould infestations could not be treated, or that the latent damp areas could not be rectified. Ms Williams and Mr Putral both outline in their reports a series of practical steps that would have been capable of satisfactorily remediating these issues within a reasonable time, with the exception of the drainage of the subfloor area. However, Ms Abeleven and Ms Williams do not conclusively determine that there is a structural problem with drainage away from and under the subfloor area. They speculate that this may be the case and recommend investigation by an engineer or hydrologist.
The tenants first put the landlords on notice that there were mould and damp issues at the premises by email to the landlords' agent on 18 April 2019 which was the day they ceased to occupy the premises. The focus then became the terms upon which an early termination of the residential tenancy agreement would be negotiated. The tenants did not provide Ms Abeleven's report to the landlords' agent until 6 May 2019, which was after they had notified the landlords' agent that they would not be returning to the premises and after both parties had accepted on or about 29 April 2019 that the residential tenancy agreement would be terminated. The tenants submit that the landlords' agent was slow to respond, unsympathetic to their concerns and did not offer to find a solution to the problem following their contact with him on 18 April 2019. That is denied by the landlords. But even if it were true it is not sufficient for the Tribunal to determine that the landlords refused to carry out necessary repairs, or failed to do so within a reasonable time. The landlords were given no time by the tenants to carry out the specific repairs and remediation recommended by Ms Abeleven before they determined to terminate the residential tenancy agreement. That report was provided to the landlords' agent only for the purpose of determining the terms upon which the tenancy would end, not for the purpose of identifying the repairs the tenants required the landlords to carry out. There can be no breach of the landlords' obligations to provide and maintain premises in a reasonable state of repair in these circumstances.
The evidence establishes to my satisfaction that the damp and pathogenic environment on level 2 of the premises in the two weeks after the tenants took possession of the premises was caused by the saturated carpets in bedrooms 2, 3 and 4 on that level which did not dry over the whole of this period. This circumstance must be distinguished from the latent damp and specific mould infestations that were present in the premises when the tenants look possession. I am satisfied that it was this environment that was causative of the illnesses experienced by the tenants and their children, which I do not doubt were discomforting and distressing for them.
But the saturation of the carpets did not result from any breach of the residential tenancy agreement by the landlords. The carpets were made wet by the tenants' carpet cleaning contractor. There is a dispute between the parties as to why they remained wet and would not dry. The only reasonable conclusion that can be drawn from the evidence is that this was because insufficient liquid was removed from the carpets during the cleaning process and they were left saturated. I arrive at this conclusion for the following reasons.
There is no evidence whatsoever that the carpets were wet or damp prior to the tenants' carpet cleaning contractors' attendance at the premises. Mr Putral's invasive inspection of the underlay and smoothedges of the carpets on Level 2 did not reveal any rust to the smoothedge metal studs or any discolouration, rot, dampness, or other water related deterioration of the underlay. If the level 2 underfloor was persistently damp one would reasonably expect to see such signs. Nor did the tenants and the other members of their family who inspected the premises in the pre-contract period notice any dampness in the carpets. Ms Williams concludes based on the moisture and humidity readings she took in the garage subfloor area that there was potential for condensation on the lower surface of the level 2 underfloor area. However, she did not note any actual wetness or signs of long-term exposure to moisture on the underfloor. Her conclusions are challenged by Mr Putral who opines that there is subfloor area is satisfactorily ventilated. The condition of the carpet smoothedges and underlay indicates that if there was a potential for condensation on the lower surface of the floor that potential did not actuate to such an extent that it caused any deterioration in the upper surface floor environment. For the same reasons it cannot be the case that pre-existing dampness in the floor was the reason the carpets did not dry.
As there was no breach by the landlords of their obligation to provide the premises to the tenants in a state fit for habitation, the tenants' compensation claims are not reached.
For the foregoing reasons the tenants' application must be dismissed in its entirety.

At a glance

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Judgment (8 paragraphs)

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