Fordham v Davies

Appeals on a question of law, and with leave 5The Civil and Administrative Tribunal Act 2013 (NSW) ('the Act') provides for appeals as of right on a 'question of law': s 80(2)(b) and also permits appeals with leave of the Appeal Panel. 6The decision below concerned the Residential Tenancies Act 2010 (NSW) ('the RT Act') and was made in the Consumer and Commercial Division of the Tribunal. It was thus a "Division decision" within the meaning of cl12(1), Schedule 4 of the Act: see the definitions of "the Division" and "Division function" in cl 1 and the provisions of cl 3(1) of Schedule 4. Accordingly we must be satisfied of the matters set out in cl 12 of Schedule 4 to the Act before the discretion to grant leave can be exercised. That clause provides: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80(2)(b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 7These provisions were examined in Collins v Urban [2014] NSWCATAP 17 at [65-79], which also decided that even if the Appeal Panel is so satisfied there is a discretion whether or not to grant leave and at that second stage further principles are to be considered, namely: [84] In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact...; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed,... (3) In relation to an application for leave to appeal relating to a question of practice and procedure, the application is to be approached with the restraint applied by an appellate court when reviewing such decisions, especially if the application is made during the course of a hearing: [citations omitted].

The Residential Tenancies Act 2010 8Part 8 (ss 157-186) of the RT Act concerns 'Rental Bonds'. By s 157, 'rental bond' is defined as 'an amount of money paid or payable by the tenant or another person as security against any failure by a tenant to comply with the terms of a residential tenancy agreement.' 9By s 161 there is to be one rental bond for each residential tenancy agreement. The bonds are deposited with the Director-General, that is to say, the Commissioner for Fair Trading in the Department of Finance and Services: s 162. 10By s 164 a claim for whole or part of the rental bond made by either landlord or tenant without the consent of all the other parties to the residential tenancy agreement requires notice to be given by the Director-General to the other parties. Section 165 of the RT Act provides: 165 Notice to tenants of claims against tenants (1) A landlord, landlord's agent or a person on behalf of a landlord who makes a claim for payment of a rental bond without the consent of the tenant must give the tenant: (a) a copy of a completed condition report about the residential premises at the end of the residential tenancy agreement, and (b) copies of any estimates, quotes, invoices or receipts for work for which the rental bond is claimed. (2) The documents must be provided within 7 days of the claim being made. (3) The documents must also be provided to the Secretary of the Department of Family and Community Services if the whole or part of the rental bond was paid by or on behalf of that Department. (4) A person who, without reasonable excuse, contravenes this section is guilty of an offence. 11Section 166 provides: 166 Matters that may be subject of rental bond claim (1) A landlord is entitled to claim from the rental bond for the residential tenancy agreement any of the following: (a) the reasonable cost of repairs to, or the restoration of, the residential premises or goods leased with the premises, as a result of damage (other than fair wear and tear) caused by the tenant, an occupant or an invitee of the tenant, (b) any rent or other charges owing and payable under the residential tenancy agreement or this Act, (c) the reasonable cost of cleaning any part of the premises not left reasonably clean by the tenant, having regard to the condition of the premises at the commencement of the tenancy, (d) the reasonable cost of replacing locks or other security devices altered, removed or added by the tenant without the consent of the landlord, (e) any other amounts prescribed by the regulations. (2) This section does not limit the matters for which the landlord may claim from the rental bond for a residential tenancy agreement. 12The Tribunal is given the power to make an order 'as to the payment of the amount of the rental bond' under s 175. 13The RT Act also makes provision for condition reports in ss 29 and 30 as follows: 29 Condition reports (1) A condition report relating to the condition of residential premises on a day specified in the report must be completed by or on behalf of a landlord before or when the residential tenancy agreement is given to the tenant for signing. (2) Two copies of the condition report must be given by the landlord or landlord's agent to the tenant before or when the tenant signs the residential tenancy agreement. (3) The tenant must complete and give one copy of the condition report to the landlord or landlord's agent not later than 7 days after receiving it and both the landlord and the tenant must retain a copy of the report. (4) At, or as soon as reasonably practicable after, the termination of a residential tenancy agreement, the landlord or landlord's agent and the tenant must complete the copy of the condition report retained by the landlord or the tenant under this section, in the presence of the other party. (5) It is not a breach of subsection (4) for the condition report to be completed in the absence of the other party if the party completing the report has given the other party a reasonable opportunity to be present when it is completed. (6) A condition report is to be in the form prescribed by the regulations and may be included in a prescribed standard form of residential tenancy agreement. 30 Condition report evidence of condition of premises (1) A condition report that is signed by both the landlord and the tenant is presumed to be a correct statement, in the absence of evidence to the contrary, of the state of repair or general condition of the residential premises on the day specified in the report. (2) This section does not apply: (a) to any matter that could not have reasonably been discovered on a reasonable inspection of the premises, or (b) to any statement in the report about which the tenant makes a written dissenting comment on the copy of the report completed by the tenant and retained by the landlord.

The claims and the decision below 14The Tribunal allowed three types of claims by the respondents against the bond, namely for: (1)'Pool service': $554; (2)'Replace damaged remote': $154; and (3)'Repairs': $2,552. 15The reasons provided by the Tribunal relevantly state: The landlords have claimed the rental bond of $4,800, and have abandoned any claims for compensation beyond that value. There are five claims by the landlords and these will be dealt with separately: Cleaning - $560 [the Tribunal found against the landlord / respondent on this] [...] Pool service - $554 The invoice tendered by the landlords is for various servicing to bring a swimming pool up to the standard required for swimming. The email referred to above, compiled by the incoming tenants, claims 'the pools [sic] is green but also looks like there has been a sewer overflow that ran down all the deck steps (lots of toilet paper looking material). To put it mildly we are greatly dissatisfied.' The photographs tendered by the landlord show algae apparent in the pool. This part of the claim will be allowed. Replace damaged remote - $154 A photograph of the damaged remote was tendered y the landlord, together with an invoice showing the cost of replacement. The damage is evident, and the tenants' evidence did not dispute this claim. It will be allowed. Repairs - $2,552 The photographs tendered to the Tribunal demonstrate the damage required to be rectified by the handyman as set out in the invoice. A close examination of the photographs tendered, including the ingoing inspection report, leads to the conclusion that the damage claimed was more than fair wear and tear. The tenants' evidence concerning painting of the premises was unsatisfactory. This claim will be allowed.

Ground 2 'Question of law on the decision of the Tribunal member - the member did not consider all of the relevant issues or apply the appropriate regulations.' 16Ground 2 raises a question of law alone and can be dealt with on that basis without any consideration of leave, therefore it is appropriate to deal with ground 2 before dealing with the other grounds raised in the Notice of Appeal. Ground 2 raises two issues for consideration. Was the Landlord's Claim out of time? 17The Tenants submit that the Landlords' application to this Tribunal was 'out of time'. This is not a topic dealt with by the reasons below. Assuming it was raised as an argument below but not dealt with, there is no substance to the point. The rental bond claim by the tenants was notified to the Landlords by letter dated 23 December 2013. Section 76 of the Interpretation Act 1987 states: 76 Service by post (1) If an Act or instrument authorises or requires any document to be served by post (whether the word "serve", "give" or "send" or any other word is used), service of the document: (a) may be effected by properly addressing, prepaying and posting a letter containing the document, and (b) in Australia or in an external Territory-is, unless evidence sufficient to raise doubt is adduced to the contrary, taken to have been effected on the fourth working day after the letter was posted, .... 18The fourth working day after 23 December 2013 was 31 December. It is common ground that the application was filed with this Tribunal was no later than 7 January 2014 (the Landlords say it was 3 January 2014). That is within the 14 days contemplated by s 164(5) of the RT Act which states '(5) The notice must state that the Director-General will pay the claim unless notified in writing by a party within 14 days that the claim is the subject of proceedings before the Tribunal or a court'. In the circumstances, we need not consider whether a claim made more than 14 days after notification from the Director-General would be ineffective. If this point raises a question of law, it should be dismissed as lacking substance; if it does not raise a question of law leave should be refused as the point equally lacks substance. Breach of the RT Act, s 165 19Section 165 of the RT Act provides that the documents referred to in s 165(1), by s 165(3), 'must be provided within 7 days of the claim being made'. Failure to comply with this provision, absent a reasonable excuse, amounts to an offence: s 165(5). The Tenants say they submitted that the Landlords did not provide the relevant material until 14 February 2014. The Landlords say they filed the material in accordance with Tribunal directions. It is unnecessary to resolve this issue. 20The tenants say they 'submitted to the Member [below] that the landlord is guilty of an offence under s 165,ss4 [sic] of the Act but the member has not dealt with this in his reasons'. Again, assuming such a submission was made, there is no substance in it. The Tribunal has no jurisdiction to find a landlord guilty of an offence against s 165 of the RT Act. It is therefore not an error of law to have failed to deal with the point. Alternatively, as the point is unarguable, leave should not be granted.

Ground 1 'No evidence that substantiates the claim by the landlord. The decision is against the weight of the evidence'

Ground 3 'The reasons were inadequate and constitute a question of law.'

Grounds 4 'The decision was a miscarriage of justice.

Ground 5 'The decision was not fair and equitable.' 21The Tenants have provided various sets of written submissions, the contents of which we have considered. 22We deal with these grounds in the Notice of Appeal together as each of them (as explained below) requires leave. None of these grounds other than Ground 3 is said to identify a question of law. For the reasons which follow Ground 3 does not raise an error of law. For completeness we note in relation to ground 1, that the complaint is not that there is no probative evidence at all, but rather, for reasons explained at length in submissions, that the evidence which exists for findings seems insufficient or not compelling to the applicant. Of course once there is some evidence for a finding, any error is one of fact not law: see Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156 (see TCL Air Conditioner (Zhongshan) Co Ltd v Castel Electronics Pty Ltd [2014] FCAFC 83 at [82]). In Azzopardi, Glass JA with whom Samuels JA concurred, said that none of the following assertions of inadequacy amount to errors of law, namely where a finding: 'is perverse, that it is contrary to the overwhelming weight of the evidence, that it is against the evidence and the weight of the evidence, that it ignores the probative force of the evidence which is all one way...' 23We deal with the key issues in relation to each of the three categories of claim in relation to the bond. Landlord's Claim for pool service 24It will be recalled that the reasons below dealt with this claim as follows: Pool service - $554 The invoice tendered by the landlords is for various servicing to bring a swimming pool up to the standard required for swimming. The email referred to above, compiled by the incoming tenants, claims 'the pools [sic] is green but also looks like there has been a sewer overflow that ran down all the deck steps (lots of toilet paper looking material). To put it mildly we are greatly dissatisfied.' The photographs tendered by the landlord show algae apparent in the pool. This part of the claim will be allowed. Adequacy of Reasons 25There are complaints about the adequacy of the reasons provided by the Tribunal pursuant to s 62 of the Act. By s 62(3) those reasons were required to set out: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made. 26It is important to recall what was said by the Court of Appeal in Amaca Pty Ltd v Tullipan [2014] NSWCA 269 at [14], namely: It is not necessary to set out the general principles regarding review for inadequacy of reasoning, which were summarised in Resource Pacific at [42]-[57]. As noted by Mahoney JA in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 273, "it will ordinarily be sufficient if ... by his reasons the judge apprises the parties of the broad outline and constituent facts of the reasoning on which he has acted." As counsel for the respondent noted, adopting the language of McHugh JA in Soulemezis at 281, "great care needs to be taken that dissatisfaction with the finding of fact does not mislead the Court into holding that the learned judge has failed to give his reasons for his finding." Finally, in Soulemezis at 282, McHugh JA stated: "What is decisive is that his Honour's judgment reveals the ground for, although not the detailed reasoning in support of, his finding of fact. But that is enough where no appeal lies against the finding of fact. Accordingly there was no failure to give reasons sufficient to constitute an error of law. 27We consider the reasons provided on this issue are evidently sufficient to comply with s 62, bearing in mind the warning of the Court of Appeal just referred to. It follows that there is no error of law in relation to the adequacy of reasons.

Grant of Leave - general considerations 28The remainder of the issues raised on this topic are not questions of law. We are not prepared to grant leave to appeal. First, it has not been demonstrated on this (or on any other issue in these proceedings), that there was a 'substantial miscarriage of justice', which Collins v Urban characterised at [71] as 'a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred.' The parties had a sufficient opportunity to present their cases. Nor was there any other demonstrated defect. 29Next, the conclusions of the Tribunal below have not been shown to be 'against the weight of evidence' in the sense used in Collins v Urban at [77] namely "where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach". 30Finally, it was not established that 'significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).' Rather, any further evidence (such as that contained in the submissions filed on 7 May 2014) was not shown to be 'new' in this sense. The tenants agreed at the hearing that this material was obtainable, although not obtained, for the original hearing. 31Even if we are wrong about this, we would not granted leave because we are not satisfied that the tests of leave at the second, discretionary stage, in Collins v Urban at [84] are satisfied, that is, we are not satisfied in relation to any matter that: (1)There is 'something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact'; (2)nor that any of the factors listed in that decision at 84] are here met. 32The tenants make much of the asserted lack of evidence about the state of the pool at the beginning and at the end of the lease. 33As to the beginning, there was a dispute in these proceedings as to the correct version of the ingoing inspection report: the landlords' evidence below was that they never received a copy with the tenants' comments, and that presumably explains why there was no finding by the Tribunal below sufficient to engage the presumption in s 30(1) of the RT Act, which provides: "(1) A condition report that is signed by both the landlord and the tenant is presumed to be a correct statement, in the absence of evidence to the contrary, of the state of repair or general condition of the residential premises on the day specified in the report." 34Nevertheless, for the purpose of considering whether to grant leave we observe that the ingoing tenant report put forward by the tenants does not differ from the landlords' assertion in that report that the 'poolwater/pool lining; pool equipment/pool fence' was 'clean, undamaged and working'. In short, it is not disputed on the tenants' own evidence that the pool and its constituent parts were in good order at the start of the lease. 35At the end of the residential tenancy agreement (13 December 2013) the evidence was that one of the tenants was present on that day when the landlords' inspection was ready to be conducted. Although it does not matter, the tenants may have continued in possession for a few more days until 16 December 2013 to continue to clean or repair the premises. The landlord conducted a further inspection on 16 December 2013 and prepared an outgoing inspection report which was not in the prescribed form. 36This failure to use the prescribed form does not prevent the Tribunal from assessing, on evidence, the state of the premises at or shortly after the time the lease ended and then considering the reasonable costs of repair of restoration, or of cleaning, as contemplated by s 166 of the RT Act. It is apparent from the reasons that this is what the Tribunal did. The photos and the email were created sufficiently close to the end of the residential tenancy agreement to allow the Tribunal to make findings of fact as to the state of the premises. There was evidence as to what was needed to sufficiently repair and restore. There is no question of law here nor any sufficient basis to grant leave.

Claims to replace damaged garage door remote 37The key reasons on this issue were as follows: Replace damaged remote - $154 A photograph of the damaged remote was tendered by the landlord, together with an invoice showing the cost of replacement. The damage is evident, and the tenants' evidence did not dispute this claim. It will be allowed. 38This reasoning complies with s 62 of the Act. The complaints made by the tenants in their submissions do not raise questions of law, nor, for the reasons already given, do they raise any issue which would justify a grant of leave.

Claims for general repairs 39The reasons here were essentially as follows: Repairs - $2,552 The photographs tendered to the Tribunal demonstrate the damage required to be rectified by the handyman as set out in the invoice. A close examination of the photographs tendered, including the ingoing inspection report, leads to the conclusion that the damage claimed was more than fair wear and tear. The tenants' evidence concerning painting of the premises was unsatisfactory. This claim will be allowed. 40The tenants submit that the 'invoice' referred to in the reasons was only an 'estimate'. The estimate, if that is what it was, meets the definition of the 'reasonable costs of repairs to or restoration of, the residential premises' within the meaning of s 166(1)(a) of the RT Act. 41What, unfortunately is unclear from the reasons, is whether the ingoing inspection report referred to in the reasons is that signed by the tenants (as the tenants contend) or signed by the landlords alone (as the landlords contend). If it is the latter, the reasons needed to, but did not, make findings as to why the landlords' version had been accepted as the 'ingoing inspection report'. If it is the former there are written comments by the tenants including as to the state of the paintwork in their version of the report in the bedroom and on the staircase, which would need to be considered when deciding whether all of the invoiced amount for repairs falls within s 166(1)(a) of the RT Act. There is no need to receive further evidence on this topic. 42It follows that there was an error of law in making this determination without having made the necessary earlier finding concerning which ingoing inspection report is to be preferred because without such a finding there is no nexus as required by s 166(1)(a) of the RT Act. 43That error does not affect the amounts in the invoice concerning the bench top ($660), the repair of a blind in the main bedroom ($110) and removal of charcoal from the garden beds ($132). 44We therefore set this aspect of the decision on repairs aside and remit it to Member Howe for reconsideration. It will be a matter for him whether there is a need for any further hearing or whether he is now in a position to reconsider matters on the papers and provide reasons on this sole remaining issue. The remainder of the decision is confirmed. 45 For these reasons the Appeal Panel makes the following orders: (1)The appeal is allowed in part. (2)The claim for painting for $1652 is remitted back to Member B Howe for reconsideration without further evidence, pursuant to s 81(1)(e) of the Civil and Administrative Tribunal Act. (3)The decision under review is otherwise confirmed. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar

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

Amendments 31 October 2014 - Request by Appeal Panel Amended paragraphs: 21 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: 09 October 2014