Ehrenfeld v Choy & Anor [2006] NSWSC 1092 | Case summary

JUDGMENT 1 HIS HONOUR: The summons before the Court seeks relief in connection with the tenancy by the plaintiff of premises known as 19 Hunter Street, Dover Heights (the premises). Initially the plaintiff seeks to challenge orders made by the second defendant, the Consumer Trader and Tenancy Tribunal (CTTT) which effectively ejected the plaintiff from the premises. CTTT has filed a submitting appearance on the usual condition. Alternative claims by way of declaration and relief against forfeiture were also advanced. 2 The events which culminated in the hearing on 26 September are part of a long series which it is necessary to chronicle. They need to be extracted from somewhat disjointed affidavits and exhibits, not all of which are relevant to determination, but provide some required context. 3 The plaintiff comes from Western Australia and moved to Sydney for "work reasons". His anticipation is that he will remain in Sydney until the end of this year. Apart from the question of the costs of this litigation, the critical matter of dispute would seem to be the occupation by the plaintiff of the premises for the remaining three months of this year. 4 The plaintiff's occupation involves frequent overseas travel. There are four children aged between sixteen and eleven in the family group. The plaintiff described himself as an "orthodox Jew", the relevance of which will later appear. 5 On 21 January 2003, the plaintiff and Mr Choy (the first defendant whom I will refer to simply as the defendant) entered a residential tenancy agreement in respect of the premises. The defendant was represented by his agent Mr Dickson. The term of lease was expressed to be for twelve months from 25 January 2003 to 24 January 2004 with provision for continuation at a rental of $5,648 per calendar month. 6 It appears that the rent was paid in a sufficiently satisfactory manner for a period but there were many complaints from the plaintiff concerning defects in the premises. Significant among these was a need which arose to repair a collapsing retaining wall, which was said to have been undermined by the roots of plants in a neighbouring property and a persistent leak in the swimming pool which made it unusable. The security alarm system was claimed to be inoperable and there were numerous requests by the plaintiff to attend to defective appliances. 7 On 23 February 2004 (by which time the plaintiff was holding over after the expiry of the term of the lease) the plaintiff wrote to Mr Dickson specifically on this occasion about the collapsing wall. He made these observations: "I do not wish to be in a situation of withholding rent to force a resolution. However, on two previous occasions, it was agreed with you that rental payments would be made, and the issue would then be resolved. As it stands, there is no consensus on this matter. Each time that I pay the rent, the urgency on the landlord to resolve the matter disappears." 8 And later in the letter he stated: "I will consider any serious offer to settle this matter in February, but will not make any payment of rent in the meantime if this matter is not resolved." 9 It should be mentioned that clause 21 of the special conditions of the lease read: "21. The Tenant acknowledges that the rent must be paid in advance and cannot be withheld for any reason as per the Residential Tenancies Act and that the Tribunal must handle any unhandled disagreements." 10 However, the dispute continued and the plaintiff claims (and so far as might be relevant, it would seem to be the case) that defects were not satisfactorily remedied. He carried out his threat to withhold some rent payments. 11 Mr Dickson prepared a notice of termination dated 1 March 2005 seeking possession on 20 March. He later prepared a second notice demanding possession on 7 May 2005. This document bears date 18 April 2005 but the service endorsement records it being posted at Woollahra Post Office on 18 May 2005. In any event the plaintiff did not yield possession in response to either of these notices. 12 On 9 May 2005 Mr Dickson, on behalf of the defendant, commenced proceedings in the CTTT. The orders which he sought were stated thus: "An order to pay all rent owing. An order to vacate the premises. An order to pay the bond to the agent." 13 The reasons for request were stated in the form instituting the proceedings as: "The tenant has not paid any rent for 5 months and has promised to do so on several occasions." 14 That statement was, in the circumstances of the ongoing dispute, to say the least, somewhat deceptive by omission. 15 On 18 May 2005 the plaintiff wrote to the Registrar informing that he had spoken to Mr Dickson on the previous day. He had been overseas in the previous week and became aware of the scheduled hearing for 23 May only upon his return on 16 May. He was leaving again for overseas on 23 May and sought an adjournment to which Mr Dickson had expressed his agreement. 16 That letter was presumably put on file and contained assertions which would have been at all relevant times accessible to anyone dealing with the matter at CTTT. It contained: "I certainly do not wish to wish (sic) that the matter be determined in my absence. I am in my third year of occupation of these premises. The agent is well aware of my concerns in relation to the property, that involve a significant number of issues including collapsing walls, unperformed maintenance, a leaking pool, and undertakings by the landlord included in the lease to provide certain facilities which have not been provided since inception." 17 Despite this, on 20 May 2005 CTTT refused the adjournment. The stated reasons were: "1. Prejudice to the applicant if matter is further delayed. 2. The tenant states the respondent has consented to the adjournment, in the circumstances the applicant's written consent should be sent to the Tribunal and this matter (adjournment) may be reconsidered. 3. The applicant alleges the tenant is 5 months in arrears. Subject to the monthly rent, the amount in dispute may soon (if not already) exceed the Tribunal's jurisdiction of $10,000.00." 18 The plaintiff changed his travel arrangements and attended the hearing on 23 May. Mr Dickson represented the defendant. Apparently as a result of negotiations they executed a handwritten agreement. Among other things it recited the existence of a residential tenancy agreement and of disputes between the parties. The plaintiff agreed to make payments of specified amounts on various dates. There was included an option for lease of the premises for a further twelve months from 1 January 2006 to 31 December 2006 at a rental of $5,840 per month in lieu of the current rental of $5,648 per month. The hearing was adjourned to a date to be fixed. 19 The next occurrence was a conciliation exercise undertaken on 27 July 2005 and this resulted in the following orders being made: "1. By consent, the tenant, GABERIEL (sic) EHRENFELD, is to pay rent, presently $5,648.00 per month, on the 1st day of the month, next payment due 1 August 2005 and once any arrears are paid in full, to pay rent in accordance with the residential tenancy agreement. 2. If these orders are not complied with then at any time before 27 October 2005 the landlord may request the relisting of the application to determine whether the tenancy agreement should be terminated. 3. By consent. 1. Notation: In full and final settlement of the claim the tenant agrees to pay the landlord the additional amounts as follows: $8000 on or before 15/9/2005; $8000 on or before 15/10/2005 and $8000 on or before 15/11/2005. 2. Notation: The landlord will organise the carrying out of an inspection of the pool on or before 3/8/2005 for any leaks and organise any subsequent repairs to the pool on or before 31/8/2005. 3. Notation: The landlord will carry out the necessary repairs to the pergola and boundary fence on or before 31/8/2005." 20 The plaintiff has claimed, and has not been contradicted, that the work to be undertaken by the landlord was not done. He withheld some payments that he had agreed to make, but made monthly rental payments as they fell due. 21 It appears that on 16 September 2005 Mr Dickson had written to CTTT (letter received 21 September) seeking relisting because "the tenant has not paid $8000 due on 15 September." It does not appear that he informed the plaintiff that he had made this application. 22 On 23 September, obviously unaware of the relisting request, the plaintiff wrote to Mr Dickson listing his outstanding complaints and adding: "As previously advised, I will not pay any sum other than monthly accruing rent whilst this work is outstanding. Furthermore, having regard to the ongoing inconvenience caused by your failure to repair, I dispute that you are entitled to this sum or any sum at all. As such, please note that if all works in 'A. BUILDERS JOBS' are not completed to a satisfactory standard within seven (7) days of the date hereof, that it is my intention to apply to the Consumer, Trader and Tenancy Tribunal seeking compensation, without further notice to you." 23 As I have indicated, Mr Dickson had in fact already approached CTTT by letter. On the same date as the plaintiff's letter (23 September) CTTT fixed the further hearing for 5 October. 24 In the meantime, Mr Dickson sent an SMS message to the plaintiff seeking an inspection of the property on 26 September. In response the plaintiff rang him and told him that he anticipated being overseas then, however, gauging Mr Dickson's reaction to be unfavourable, he again reorganized his travel and Mr Dickson and the defendant attended on the plaintiff at the premises on Sunday 25 September. The evidence does not reveal that either of these callers revealed to the plaintiff that the relisting application, by then fixed for 5 October, had been made. The plaintiff's reorganized travel saw him arrive in China on 26 September. 25 Although Mr Dickson was apparently well aware of the plaintiff's absence he wrote to him on 30 September seeking an internal inspection of the property on Monday 10 or Tuesday 11 October "at a suitable time for you". By this time Mr Dickson undoubtedly would have been aware of the fixture for 5 October. 26 The plaintiff returned from China on Sunday 2 October. Monday 3 October was a public holiday and 4 and 5 October were Jewish high holidays. The latter was described as Rosh Hashanah. The plaintiff's orthodox beliefs forbade his conducting business on those high holidays. A letter from CTTT notifying that the hearing was scheduled for 5 October would have arrived in the ordinary course of the post either during the plaintiff's absence or on those days but he did not open any mail until 6 October after the end of the period of religious observance. 27 Mr Dickson had appeared at the Tribunal on 5 October 2005. The proceedings on that day were recorded on a disk and the defendant's solicitor, Ms Chen has exhibited a transcript of what can be extracted from the disk. It is no criticism of her that the product is quite garbled but it can be ascertained that nothing was communicated to the Tribunal to reveal that the plaintiff was contending that the defendant had failed to comply with the earlier agreement nor was his known absence overseas communicated. The history of the matter clearly shows that it was not the plaintiff's intention to allow matters to proceed by way of default and this conclusion should have been reached by CTTT if it had examined what must have been in its file. 28 At this hearing the presiding member adverted to the discrepancy in the service endorsement on the April/May termination notice and to the limit on jurisdiction to order payment. The clear impression gained from the transcript is that the Tribunal simply sought to "get around" any perceived problems facing the landlord so as to accommodate his wishes. 29 Therefore an order for termination of lease was made and it was ordered that possession be given up on 12 October 2005. 30 Upon becoming aware of what happened the plaintiff immediately approached CTTT. On 7 October he lodged a formal application for rehearing and submitted a lengthy affidavit detailing the disputes and their non resolution and the reasons why he was unaware of the hearing scheduled for 5 October. 31 He also set out a lengthy itinerary showing his anticipated further absences during the period between mid October and 10 November and the reasons for those absences. He indicated his agreement to early rehearing before his departure if it could be arranged. It is obvious that he was operating under an impression that his application for rehearing would itself involve a hearing of similar nature to 5 October which occurred in his absence. This is apparently not the practice of CTTT and such applications are determined "on the papers". There is no evidence that anybody at the registry informed the plaintiff of this practice and as I shall later mention the file notes seem to suggest that they were content to leave him with an obvious misapprehension as to this procedure. 32 Because of his concern about the order of 5 October and having it stayed and the possibility that what he thought would be hearing of his application might be listed in his absence he made contact with the registry. As I have said there are file notes of some of these contacts. On 10 October a note records that the plaintiff was told that his application would be "considered" on 11 October. This did not happen. There were contacts on 7 and 11 October about the payment of a fee of $30. So far as the file notes reveal I would not conclude that consistent information was being provided but what is significant is that no one told the plaintiff that he would not have a hearing listed, as he obviously anticipated. 33 Although he had been told that his application would be "considered" on 11 October there is a file note of an officer in the registry calling him on 12 October. That file note reads: "I called (A), Mr Ehrenfeld and informed about stay order and member's request for submission. I informed him that (R) has time until 26/10/05 to submit his opinion after that tribunal member will make decision if a rehearing will be granted or not. He asked me to make a file note about his unavailable days as per his application for rehearing. I told him that we would consider this information." 34 If, as the registry officer presumably knew, the plaintiff would not be physically heard on this application it was irrelevant to make a note about his personal unavailability and whilst I would make no finding in the absence of opportunity for explanation by that officer, the note on its face is suggestive of at least encouraging the plaintiff in a mistaken belief, if not actively deceiving him. 35 Despite what was said about "(R)" having time until 26 October, on 19 October, which was a date during the period when CTTT had been told that the plaintiff would be overseas, the application was dealt with. The following orders and reasons were recorded: "1. The application for a re-hearing of matter RT 05/23580 is not granted as the delegate of the Chairperson is not satisfied that the applicant may have suffered a substantial injustice. 2. The stay order made on matter RT 05/23580 on 11/10/05 is lifted. Written Reasons The notice of hearing was received by the tenant, however he chose not to open it, although he had the opportunity to do so prior to the start Rosh Hashanah. The Member on the day of the hearing, on 5/10/05, took into account, as he was entitled to do, the extend (sic) of the arrears at the day of the hearing. The tenant had the opportunity, prior to the hearing, to seek an adjournment, on religious grounds or to have someone represent him at the hearing. (The Tribunal notes the tenant was apparently travelling back to Australia on 1st October, a Saturday). APPLICATION FOR A REHEARING NOT GRANTED." 36 The finding that the notice had been "received by the tenant" would seem only to have been able to be made by reference to considering the ordinary course of post. The documentation shows that it was despatched on 23 September which was a Friday and the defendant well knew that the plaintiff had altered travel plans so as to arrive in China on the Monday after the visit by the defendant and Mr Dickson on the Sunday. As I have said, these were facts and circumstances which had been withheld from the Tribunal. The circumstances in which the letter had not been opened have already been recounted. 37 The plaintiff appeared understandably disturbed by the implication in the notation above quoted which conveys a veiled comment on his credibility if one assumes (and no other reference is apparent) that it relates to his claim of orthodoxy and the inconsistency with that claim by travelling on the Sabbath. I accept the plaintiff's evidence that he travelled after dusk and arrived in Australia on the Sunday. That is entirely consistent with the plaintiff's assertions. 38 Not only was the application for rehearing rejected whilst CTTT had express information as to the plaintiff's absence but it also authorized execution during that period and on 2 November the Sheriff ejected the plaintiff's four children and his mother in law from the premises. At the time the plaintiff, accompanied I gather by his wife, was in Europe. He returned to Australia and approached this Court on 9 November 2005. On 10 November, upon payment of all the arrears which he had withheld and keeping the current rent (as it was) up to date, it was agreed by the defendant that he could re-enter the premises. It is common ground that to the present time all rental payments are up to date. It might be mentioned that the plaintiff has been tendering an amount increased in accordance with the earlier mentioned option (which is conceded not to have been exercised in writing) and the agent has been returning the surplus by cheque. In that it might be considered that the handwritten agreement created a new or renewed lease, the defendant gave another notice of termination (which was contingent in expression) in January 2006. 39 As I have said, the plaintiff therefore remains in occupation of the premises and, as I understand it, is planning to return to Western Australia. The material in support of his application for rehearing detailed the high and disproportionate cost of removal for an estimated short period before that return. 40 I seek to give no offence to counsel when I comment that the arguments were presented in as uncoordinated a fashion as the evidential material. I deal first with the primary relief sought against the orders made by CTTT. 41 There is a statutory limit on the powers of this Court to grant relief in respect of orders made by that Tribunal. In short, there must be demonstrated an absence or erroneous ruling as to jurisdiction or a denial of procedural fairness. The plaintiff relies upon both aspects. 42 The first contention of the plaintiff was that, by reason of the discrepancy in the service endorsement abovementioned which required delivery of possession before the stated date of service, the notice of termination was not given in accordance with Pt 5 of the Residential Tenancies Act 1987 and accordingly CTTT had no jurisdiction to make any order: see s 64(3) of the Act. 43 Even assuming that the service endorsement was made on the copy despatched to the tenant, there is no basis upon which a reasonable person would be misled. It was an obvious clerical error. The notice of termination is in character similar to a notice to quit. It would be clear that the notice was in this case proclaiming a termination of the tenancy with effect from 7 May. The plaintiff's argument on this basis must fail: see Carradine Properties Limited v Aslam 1971 1 All ER 573; Chief Executive Officer (Housing) v Brown 2000 156 FLR 158. 44 The next argument in relation to jurisdiction focussed upon the relief sought in the defendant's initial application to the Tribunal. As I have recited, it claimed, and not as alternatives, termination, payment of rent and payment of the bond deposit to the agent. The lastmentioned had an obscure basis in that it did not appear to be alleged that the plaintiff damaged the property or otherwise left it in need of attention. 45 As affected as to amount by regulation, the Residential Tenancies Act in s 85 restricts the power of CTTT to making an order for payment not exceeding $10,000. CTTT did not purport to make any such order but noted agreement between the parties for payments in excess of that sum. The plaintiff argued that, in effect, the orders sought were indivisible and the rent claimed in excess of $10,000 placed the claim into a category of claim for money beyond the jurisdictional limit. 46 I reject these propositions. The order for termination made by CTTT was plainly within power. No ruling made by the member presiding was erroneous in the sense that there was no purport to order any payment in excess of the maximum limit. The Tribunal is not a court of pleading and if error is to be detected it must be found in what was or was not done and not in the informal documentation which brings a matter before it. 47 I turn to the plaintiff's claim of denial of procedural fairness. The first order sought by the plaintiff is one in the nature of certiorari in respect of orders made on 20 May, 27 May, 5 October and 19 October 2005. The first date may be erroneous but in any event only the two dates lastmentioned involved orders of consequence and it suffices to deal with them. 48 The defendant made a threshold submission that no right of appeal can exist from the decision on 19 October whereby the delegate of the Chairperson of CTTT refused application for rehearing. Section 68 (8)(c) of the CTTT Act provides: "The Chairperson's decision whether to grant or refuse the application; ….. (c) is final and not subject to review of any kind." 49 As is revealed in the foregoing chronicle, the refusal was made in circumstances which any fair minded person would find disturbing. The registry by its Reponses encouraged the plaintiff's belief that he would be heard (other than on the papers) in respect of his application and it was eventually determined other than on a date when he had been led to believe that it might be dealt with and was in fact dealt with on a date when CTTT had been expressly told that he would be overseas. At no time did CTTT or its staff suggest that his schedule would not be accommodated, quite the contrary, nor was he given any warning that his request to be notified would be ignored. In addition, the parenthetical notation in the reasons given was self evidently distasteful and understandably gave rise to offence. Nevertheless, the statutory exclusion of review is unequivocal. That a decision of this nature is made invulnerable recognizes that setting it aside would not alter the status quo, that is to say that the decision of which reconsideration is sought would in any event still stand. I accept the correctness of the defendant's submission on this aspect. 50 The defendant further argues however, that s 68 (8)(c) above quoted evinces a legislative intention that no right of appeal (even as limited by s 65 to grounds of jurisdictional error or denial of procedural fairness) will continue to exist after a party has applied for a rehearing. I see nothing in the words of the statutory provision to this effect. 51 The defendant sought to support the argument that the plaintiff had in effect made a final election by analogy with the inconsistency of a supplicant claiming relief on the basis that there has been no breach and also seeking relief against forfeiture. Reference was made to observations of Austin J in Kumaragamage v Rallis [2001] NSWSC 466: "In my opinion the cases establish that a lessee must elect between seeking relief on the basis that there has been no breach, and seeking relief against forfeiture. Having elected to conduct the interlocutory hearing on the former basis, the plaintiffs were not in a position to invite the Court to grant interlocutory relief on the latter basis. Indeed, they did not seek to do so until final submissions. In my view, they were not precluded, simply by seeking relief against forfeiture in the summons, from putting their interlocutory case solely on the basis of the contention that there had been no breach. A real problem will arise for them if they go to the final hearing seeking the two inconsistent forms of relief. They will have to decide, before that time, whether to admit that there have been breaches and offer to remedy them, as the price for obtaining relief against forfeiture, or to deny breaches and thereby jettison their relief against forfeiture case." 52 It is true that the plaintiff's amended summons seeks relief against forfeiture as an alternative relief but this arises from the somewhat unconventional attempt to tack the claim onto what is essentially a form of appeal (in substitution for former prerogative relief) from orders of CTTT. There never has been any denial by the plaintiff that he withheld some rent payments, indeed he proclaimed it. It may be that he overlooked the express condition 21 above quoted but he must have been aware of the facts which give rise to the breach. The defendant argues that the plaintiff has repudiated the lease. This is a suggestion first made, it appears, in the hearing. Progressive Mailing House Pty Limited v Tabali Pty Limited 1985 157 CLR 17 was cited. The plaintiff's situation is distinguishable from that case. As Mason J recorded (at page 37) in that case the tenant's non payment represented the whole of what the landlord was entitled to receive for the entire term of the demise in a context where the landlord would remain liable for outgoings in respect of the premises. Wilson J (at page 38) noted that there were findings of other "breaches of covenant" by the trial judge. 53 In the present case, the plaintiff has made substantial payments. The withholding was temporary and afterwards he resumed meeting what were current liabilities. The plaintiff made it plain that he was not repudiating the lease but rather trying to inspire the landlord to meet his obligations under it. The defendant was, at all times, made well aware of this stance of the plaintiff and at no time until this hearing was it suggested that the plaintiff had repudiated or that the defendant had accepted any implied or constructive repudiation. 54 The order of CTTT which will have the most significant practical effect of ejectment of the tenant is that made on 5 October 2005 and it is the only order with which this Court need specifically deal. 55 The next obstacle claimed by the defendant to bar relief to the plaintiff is that these proceedings are out of time. Should leave be required, the plaintiff sought to amend so as to seek it. To put such issue beyond doubt, I grant leave and grant any requisite extension of time for commencement of these proceedings. 56 It was always perfectly plain that the plaintiff was resisting orders sought by the defendant and this was well known to him. Orders were obtained from CTTT in the absence of the plaintiff facilitated by the selective material put before it. In effect the defendant, through his agent, led CTTT to act upon an assumption that this was an essentially simple case of a tenant failing to meet his obligation to pay the rent. As the foregoing chronicle demonstrates, this was far from being the case. 57 It was argued by the defendant that the plaintiff was now advancing matters which he had not previously relied upon. Presumably this is a reference to the affidavit and the submissions made in support of the refused application for rehearing. I note the reference to Street v Consumer Trader and Tenancy Tribunal [2003] NSWSC 1109. As has already been pointed out the plaintiff was not heard (except on the papers) in respect of the application for rehearing. It is mere speculation to assess what would or would not have been put by the plaintiff on the hearing of an application for rehearing if that had been the procedure adopted by CTTT. I accept the general proposition that a party may not be allowed on appeal to raise new argument which had not been put during the hearing when he had an opportunity to do so but that rule has been defined in circumstances which pertain to conventional litigation and I would not regard it as of such universal application as to inhibit argument when proceedings have been conducted along the lines of the practices of specialized tribunals which are not comparable to those generally adopted in traditional courts of justice: cf Coulton v Holcombe 1986 161 CLR 1. 58 In order to succeed it is necessary for the plaintiff to show that he has been denied procedural fairness in relation to the hearing or determination of the matter (s 65 CTTT Act). I do not consider the plaintiff must show a conscious denial of fairness by the Tribunal and if it is in fact denied as a result of misinformation, disinformation or omission of information provided to it, the remedy remains available. 59 The lengthy recounting of events leading to the making of orders in the absence of the plaintiff on 5 October 2005 amply evidences a denial of procedural fairness suffered by him. I consider it unlikely that CTTT would have made the draconian orders which it did on that day if the plaintiff's side of the story had not been suppressed as a result of the actions of the defendant and his agent. Although that conduct was the catalyst for denial, such in fact occurred as a result of the action of CTTT in making the orders. CTTT should have been aware that the plaintiff wished to be heard and proceeding in his absence in the circumstances constituted a relevant denial of procedural fairness. 60 I conclude that the plaintiff is entitled to relief in respect of those orders. It is unnecessary to proceed to the alternative claims. Nor is it necessary to determine the subsidiary issues concerning whether the handwritten agreement of 23 May 2005 is supplementary to the demise earlier entered, a novation of it, a new lease or, whether a new lease arose out of the acceptance of subsequent rent payments together with any ancillary issue following the "contingent" notice of termination given in January 2006. 61 I direct an order in the nature of certiorari bringing up the orders of the second defendant (CTTT) made on 5 October 2005 together with any writ or process in execution of those orders and such orders, writs or process are quashed. 62 The first defendant is ordered to pay the plaintiff's costs of the summons.

Ehrenfeld v Choy & Anor

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Judgment (12 paragraphs)

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